Chapter 34 - Rights of Creditors

Question 1

Creditor

Answer 1

• Person to whom I owe money.

Question 2

Debtor

Answer 2

• Person who owes money.

Question 3

Secured

Answer 3

• If you are the creditor and the debtor doesn’t pay back, the creditor can reposses assets of mine.

Question 4

Unsecured

Answer 4

• Credit Cards

- If I don’t pay my bill, they can sue me, but don’t have any way to take assets.

Question 5

Lien

Answer 5

• Arises when the debtor grants a security interest to the creditor.
• Creditor has a legal right to a specific asset of mine if I don’t pay back.

Question 6

Lien holder

Answer 6

• The one who claims lien against me.

Question 7

Release the Lien

Answer 7

• If i pay off debt, the lien is released and I’m free.

Question 8

Mechanic’s Lien

Answer 8

• Applies to real property.
• The lien is filed through a state agency and is public information.
• Improvements on real property.
• If I want to sell my house but it has a lien on it, the mortgage company won’t let me buy until all the debt is gone.

Question 9

Sill v. Hart

Answer 9

• Sill was a homeowner and Hart the contractor.
• Hart stops building a house about half way through.
• Hart still had a lien on the part built.
• Sill sues, but Hart said he hasn’t been paid for half of the house.
• Hart wins because of the lien on the home.

Question 10

Artisans Lien

Answer 10

• Lien against personal property.

Question 11

Judicial Lien

Answer 11

• Lien on any property I have by a judge if I am a debtor and I lose.

Question 12

Mortgagor

Answer 12

• One who borrows/debtor

Question 13

Mortgagee

Answer 13

• One who loans the money

Question 14

Foreclosure

Answer 14

• If I fail to pay the bank, they can repossess my home.

Question 15

Right of Redemption

Answer 15

• A period of time after foreclosure to pay back the bank.

Question 16

Deed of Trust

Answer 16

• Similar to mortgage.

- Borrowing money if foreclosure happens.

Question 17

Suretyship

Answer 17

• Basically a cosigner is primarily liable to the creditor.

- Creditor can go directly to them (suretee) if I don’t pay.

Question 18

Guarantee

Answer 18

• Basically a cosigner (guarantor) that is secondarily liable to the creditor.
• Lender has to try to collect from me first.

Question 19

Garnishment

Answer 19

• A court orders a 3rd party (garnishee/employer) to withhold funds from the debtor.

Question 20

Cote v. Cote

Answer 20

• Fighting over a garnishment.
• X-husband stopped paying support.
• X-wife got garnishment which included his veteran’s disability income which can’t be garnished.
• X-husband won - didn’t have to include vet income.