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Yaeger REG > Mod 31 Debtor-Creditor Relationships > Flashcards

Mod 31 Debtor-Creditor Relationships Flashcards

1
Q

Surety relationship:

Statute of frauds

A

Signed writing is required for surety’s promise to be enforceable

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2
Q

Surety relationship:

Consideration is present if…

A

The surety, creditor and debtor are all created at the same time

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3
Q

If the surety comes in after the debtor/creditor relationship is created…

A

There must be additional consideration going to the surety

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4
Q

Rights of a surety:

Subrogation

A

After the surety pays the creditor in full, he gets all the creditor’s
Rights

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5
Q

Rights of a surety:

Reimbursement 2

A

1 The right of the surety to recover from the debtor

2 any money the surety had to pay the creditor after the debtor’s
default

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6
Q

Rights of a surety:

Exoneration 2

A

1 before the debtor’s default, a surety gets a court order that the
Debtor pay

2 the surety will still be required to pay the creditor if the debtor
Defaults

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7
Q

Co-suretors

A

2 or more sureties of same debt (even if unaware of each other)

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8
Q

Co-sureties: Right of contribution

A

Once one co-suretor pays, he may receive a pro rata share

Or contribution form all other co suretors

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9
Q

Contribution is only available to…

A

Co-suretors

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10
Q

Proportionate liability of each co-suretor, formula

A

Proportionate liability =
(Amount guaranteed by individual co-suretor)
X (amount paid to creditor amount guaranteed by all co-sureties)

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11
Q

If a co-suretor’s obligation is discharged in bankruptcy…

A

Their dollar amount should not be considered in determining the
Pro rata share if the other co-suretors

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12
Q

Creditor may do any if the following in any order after the debtor defaults:

Immediately…3

A

1 demand payment from surety

2 demand payment from debtor

3 go after collateral if there is any

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13
Q

Rights of creditor after default:

Exception guarantor of collection (conditional guarantor), promises to pay only after…

A

Creditor exhausts all remedies against the debtor

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14
Q

Rights of creditor after default:

Exception: creditor must…

A

Creditor must give notice of default to guarantor of collection

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15
Q

What are 3 good defenses for a surety?

A

1 lack of writing or

2 lack of consideration

3 fraud by the creditor

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16
Q

What is always a good defense for a surety?

A

Payment or tender of performance

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17
Q

Fraud by the debtor is…2

A

1 Not a good defense for a surety

2 Unless the creditor was aware of the fraud

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18
Q

Surety may not use defenses that are…

A

Not use defenses that are personal to debtor

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19
Q

3 examples of defenses that are personal to debtor

A

1 infancy

2 insanity

3 bankruptcy

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20
Q

Any action by creditor which increases the risk of a Surety…

A

Release the surety to the extent of the increased risk

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21
Q

Any action by creditor which increases the risk of a Surety, releases the Surety to the extent of the increased risk:

A binding…

A

A binding extension of time by creditor totally releases the Surety

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22
Q

If a creditor delays on collection…

A

By not agreeing to extend time, the surety is not released

23
Q

Release of one co-suretor by a Creditor without the consent of other co-sureties…

A

Increases their risk by the amount of contribution they would have collected

24
Q

If creditor releases debtor without…

A

Without reserving rights against surety, surety is released

25
Q

If the creditor reserved rights against the surety…

A

The surety is not released

26
Q

Creditor pre-judgment remedies, define

A

Actions by creditor prior to receiving judgment

27
Q

Creditor pre-judgment remedies, 2 types

A

1 attachment

2 pre-judgment garnishment

28
Q

Creditor pre-judgment remedies:

Attachment, define 2

A

1 puts lien on debtor’s property so it’s available if a judgment is
Obtained

2 requires a hearing before judge and creditor may be required
To post bond

29
Q

Creditor pre-judgment remedies:

Pre-judgment garnishment, define 2

A

1 places lien on debtor’s property or money in the hands of 3rd
Party

2 so property is available to satisfy a judgment

30
Q

Creditor post-judgment remedies, define

A

Actions by creditor after getting a judgment

31
Q

Creditor post-judgment remedies:

Writ of execution, define 2

A

1 served by a sheriff on debtor demanding payment of judgment

2) occurs if returned “unsatisfied” creditor can levy on debtor’s property and force a public sale

32
Q

Creditor post-judgment remedies:

Garnishment, define

A

Creditor collects money from debtor’s wages or bank accounts

33
Q

Surety

A

One who promises to pay creditor if debtor defaults

34
Q

Fraudulent conveyance is a phony transfer of property…

A

Phony transfer of property, by debtor to a 3rd party to stop creditors
From attaching it

35
Q

Fraudulent conveyance is a phony transfer of property by debtor to a 3rd party. The 3rd party is…

A

Expected to return property to debtor at a later time

36
Q

Fraudulent conveyance:

Creditors may still…

A

Creditors may still attach property, upon proof the transfer was fraudulent

37
Q

Indications of fraudulent conveyance include…3

A

1 debtor remains in possession of property

2 debtor retains an equitable interest in the property

3 transfer was done secretly

38
Q

Composition of creditors, define

A

Agreement between debtor and creditor to discharge the debtor’s
Debts in return for partial payment by debtor

39
Q

Composition of creditors:

Debts are only discharged when…

A

Debtor completes all partial payments

40
Q

A composition of creditors is only binding…

A

Only binding on creditors who agree to it

41
Q

Assignment for benefit of creditors, define

A

Debtor transfers property to trustee to pay creditors on a pro rata
Basis

42
Q

Assignment for benefit of creditors, Doesn’t require…

A

Doesn’t require agreement of other creditors

43
Q

Assignment for benefit of creditors, Doesn’t discharge…

A

Doesn’t discharge Debtor’s debts

44
Q

Assignment for benefit of creditors, protects…

A

Protects assigned property from attachment by creditors

45
Q

Fair Debt Collection Practices Act

A

Prohibits abusive, deceptive and unfair debt collection by collection agencies

46
Q

Fair Debt Collection Practices Act, who does it cover? Who does it not cover?

A

Only covers collection agencies, not original creditor

47
Q

Fair Debt Collection Practices Act:

4 actions it prohibits collection agencies from taking

A

1 disclosing debt to 3rd parties
2 communicating with debtor at unreasonable times
3 communicating with debtor if he has an attorney
4 use of harassing, oppressive or abusive conduct/false representations

48
Q

Fair Debt Collection Practices Act:

Upon debtor’s written demand…

A

The collection agency must stop all contact

49
Q

Fair Debt Collection Practices Act:

Enforced by…

A

the Federal Trade Commission

50
Q

Fair Debt Collection Practices Act:

Debtor’s may sue for…

A

May sue for money damages for violation of the act

51
Q

Certain property of the debtor is exempt from attachment or garnishment. 2

A

1 homestead exemption

2 social security benefits

52
Q

Homestead exemption 2

A

1 protects debtor’s equity in his residence from attachment by
Creditor

2 no protection against mortgage or against valid IRS tax lien

53
Q

Social security benefits and disability payments are…

A

Exempt from attachment or garnishment

54
Q

If they violate the Fair Debt Collection Practices Act, Collection agencies are only liable for…

A

Civil liabilities (not criminal liabilities)

Yaeger REG (77 decks)

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