DEBTOR-CREDITOR RELATIONSHIPS Flashcards

1
Q

What is a surety?

A

a contract that MUST be in writing to be enforaceable
someone who agrees to be liable for someone elses debt; liable when the debtor has defaulted
“co-signor”

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2
Q

A surety CANNOT compel the creditor to:

A
  1. collect from the debtor

2. proceed against the debtor’s collateral

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3
Q

3 types of estates & describe them

A
  1. Fee Simple - complete ownership for unlimited duration
  2. Fee simple defeasible - ownership terminates upon happening of certain event
  3. Life estate - ownership granted by grantor; subject to life of tenant or another party
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4
Q

Easements

A

Building a road across another’s property to get to the main road without taking possession of that person’s realty

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5
Q

What makes a deed valid?

A

Description of the property

Price does NOT need to be included

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6
Q

What gives a deed the BEST protection of title?

A

general warranty

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7
Q

How does one transfer property?

A
  1. Adverse possession
  2. Will/inheritance
  3. Gift
  4. Sale
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8
Q

What is a fixture?

A

Personal property
Once it attaches to realty it becomes part of the realty unless the person who attached it intends for it to be a fixture

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9
Q

Purchase Money Security Interest

A

Special type that has priority over other types of interests in the same collateral if properly perfected

i.e. creditor sells asset to debtor on credit and retains security interest in collateral for purchase price
OR creditor advances funds used by debtor to purchase the collateral and retains interest in collateral

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10
Q

Types of Collateral

A

Consumer goods (personal use)
Inventory (goods held for sale)
Equipment (other goods used in business)

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11
Q

Fraud by the Creditor

A

surety may use this defense that they were induced into agreement by fraud

cannot use against debtor unless creditor is aware of fraud

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12
Q

Personal Defenses against Debtor

A

Surety cannot use personal defenses (infancy, illegality or insanity) of the debtor

can only use their own

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13
Q

Writ of garnishment vs Writ of attachment

A

WOG - debtor owes creditor and property is in hands of 3rd party i.e. wages owed by employers, bank account, debts owed to debtor

WOA - seizing property belonging to the debtor by a sheriff

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