Mod 3: Creditors' Rights and Bankrupty (29-31)

Question 1

What are the 3 categories of Liens?

Answer 1

• Consensual (both parties agree)
• Statutory (state statute)
• Judicial

Question 2

What law governs Consensual Liens?

Answer 2

When personal property is the collateral - UCC Article 9

When real property is collateral - Mortgage - Common Law, varies by state

Question 3

Mechanic’s Lien

Answer 3

Nonpossessory filed lien on real estate for labor/services

Question 4

Artisan’s Lien

Answer 4

Possessory lien on personal property for the labor done to property

Question 5

Innkeeper’s Lien

Answer 5

Possessory lien on baggage for unpaid hotel charges

Question 6

Judicial Lien

Answer 6

Court-ordered seizure/sale of property

Question 7

Garnishment

Answer 7

Permits a creditor to collect a debt by seizing property of the debtor held by a third party (garnishee) like an employer or a bank. [state statute]

Question 8

Creditor’s Composition Agreement

Answer 8

Creditor takes less than owed on liquidated debt (debts are set and not in dispute); Binding for the creditors because share depends on participants