Debtor-Creditor Relationship

Question 0

What effect does a cosurety’s BK have on the Right of Contribution calculation

Answer 0

Ignore bankrupt cosurety’s share

Question 1

Does a creditor have to go after collateral and debtor before surety?

Answer 1

No

Question 2

What is a composition of creditors and what is an assignment? What effect does this have on the debtor?

Answer 2

Composition of creditors occurs when creditors make agreement with each other to accept less than the full debts as full satisfaction of the debt. Debtor is released from debt. Assignment of debt just assigns debt to another and does not release debtor

Question 3

What happens to a surety’s risk when collateral is released?

Answer 3

Surety’s liability is reduced

Question 4

What is a right of subrogation?

Answer 4

If surety fulfills obligation of debtor, the surety inherits the rights of the creditor

Question 5

Can surety use fraud as a defense against payment?

Answer 5

Yes

Question 6

What recourse does a surety have against a debtor before payment?

Answer 6

Surety has right of exhoneration- to compel debtor to pay

Question 7

Is a 3rd party beneficiary as surety?

Answer 7

No

Question 8

To whom does the homestead exemption apply/not apply?

Answer 8

Applies to BK trustee and unsecured creditors, not lienholders and secured creditors

Question 9

Is debtor entitled to notice before disposition of any type of lien?

Answer 9

Yes

Question 10

What remedies may a creditor use?

Answer 10

Writ of attachment (seize personal property) or writ of garnishment

Question 11

Can surety use personal defenses of debtor?

Answer 11

No