Creditors Rights and Remedies

Question 1

If a collateral is released or impaired

Answer 1

the surety’s obligation is reduced by the value of the collateral or by the impairment amount

Question 2

Bankruptcy and Death

Answer 2

is a personal defense BUT not a defense to a surety

Question 3

Adjudicated incompetent

Answer 3

can potentially made a debt voidable by the creditor

Question 4

Creditors may

Answer 4

1) collect full amount of debt from suretys
2) May collect from the lender
3) Attempt to collect up to the agreed upon collateral %

Question 5

A surety is released from the obligation

Answer 5

when a creditor’s modification of the contract increases the surety risk

Question 6

A creditor must

Answer 6

1) notify the guarantor of the debtor’s default then

2) attempt to collect the debt

Question 7

Under the statue of frauds under common law

Answer 7

a surety’s (guarantor’s) agreement to answer for debt or default must be in writing