Evaluation Of Pledge As A Form Of Security

Question 1

4 benefits for the creditor of having a pledge as a form of security?

Answer 1

1. he’s in possession so he has control over the asset
2. He can foreclose in the case of default
3. he has a general preference
4. He’s secured on insolvency

Question 2

What is a burden on the creditor when having a pledge as a form of security?

Answer 2

They have to care for and maintain the item

Question 3

Why is pledge usually a terrible form of security for a debtor?

Answer 3

because they cannot use the asset