DEBTOR-CREDITOR RELATIONSHIPS Flashcards
What is a surety?
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”
A surety CANNOT compel the creditor to:
- collect from the debtor
2. proceed against the debtor’s collateral
3 types of estates & describe them
- Fee Simple - complete ownership for unlimited duration
- Fee simple defeasible - ownership terminates upon happening of certain event
- Life estate - ownership granted by grantor; subject to life of tenant or another party
Easements
Building a road across another’s property to get to the main road without taking possession of that person’s realty
What makes a deed valid?
Description of the property
Price does NOT need to be included
What gives a deed the BEST protection of title?
general warranty
How does one transfer property?
- Adverse possession
- Will/inheritance
- Gift
- Sale
What is a fixture?
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
Purchase Money Security Interest
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
Types of Collateral
Consumer goods (personal use)
Inventory (goods held for sale)
Equipment (other goods used in business)
Fraud by the Creditor
surety may use this defense that they were induced into agreement by fraud
cannot use against debtor unless creditor is aware of fraud
Personal Defenses against Debtor
Surety cannot use personal defenses (infancy, illegality or insanity) of the debtor
can only use their own
Writ of garnishment vs Writ of attachment
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