Suretyship and Judicial Liens

Question 1

True or False?

Surety’s promise must be evidenced by writing?

Answer 1

True

It needs to be in writing to be enforceable based on the Statues of Fraud.

Question 2

Define: Exoneration

Answer 2

Surety has the right to compel principal to pay.

This is BEFORE surety pays the creditor.

Question 3

Define: Subrogation

Answer 3

AFTER the surety pays the creditor, the surety can sue the principal and enforce rights the creditor had against the principal.

Question 4

Define: Reimbursement

Answer 4

AFTER the surety already pays, the surety can sue the debtor.

Question 5

Define Contribution

Answer 5

A surety can compel (sue) his co-surety to pay if he contributes more than his share.

Question 6

What is a judicial lien?

Answer 6

A creditor can request a lien be imposed on a specific property if debts go unsatisfied.

Example: mechanic’s or artisan’s liens on property

Question 7

Define:

Garnishment & Writ of Attachment

Answer 7

Writ of Attachment = ordering a sheriff to seize personal property; creditor can collect money from debtor’s wages

Garnishment = ordering a 3rd party to release a debtor’s property to the creditor

Question 8

What is Composition of Creditors?

Answer 8

An agreement between a debtor and at least 2 creditors to fulfill debt at less than full payment.