Question 1

Reid buys a car from Skye online. To assure that the car is delivered in the condition promised, Reid

Accepted Answer

Using an escrow company allows both parties to ensure that the car is delivered in the promised condition before the payment is released, providing a secure transaction method.

Question 2

Robert borrows $15,000 from State College to help pay for his education. He signs a note payable to the school for the amount of the loan plus interest. Robert defaults, and the school transfers the note to a collection agency. This means that

Accepted Answer

When a borrower defaults on a loan and the debt is transferred to a collection agency, additional costs associated with collecting the payment, such as fees and expenses incurred by the collection process, can legally be added to the unpaid principal amount of the loan.

Question 3

Hailey, a U.S. citizen, buys John Lennon's piano from Kent, who is in Great Britain. Particularly useful to Hailey, who would prefer to conduct this deal as a secured transaction, is

Accepted Answer

Escrow.com is particularly useful for conducting secured transactions, as it acts as a neutral third party to securely hold funds until all parties fulfill their contractual obligations, reducing the risk of fraud.

Question 4

Bern defaults on his debt to Credit Loan Company. The creditor obtains a judgment against Bern, who immediately moves to another state. Generally, the judgment will be

Accepted Answer

Under the Full Faith and Credit Clause of the U.S. Constitution, judgments obtained in one state are generally recognized and enforceable in other states. This means that if Bern moves to another state, the judgment against him can still be honored and pursued by the creditor in the new state.

Question 5

Dora defaults on her debt to EZ Credit Company. The lender obtains a judgment against Dora, who quickly moves to another state. The judgment is domesticated in Dora's new location. If the lifespan of the judgment lapses before it can be collected, the domestication

Accepted Answer

A domesticated judgment can typically be renewed in the new state to extend its enforceability beyond the original lifespan.

Question 6

Beth borrows $10,000 from the U.S. Department of Education to help pay for her education at Community College. She signs a note payable to DOE for the amount of the loan plus interest. The borrower will be considered in default if she fails to

Accepted Answer

The borrower is considered in default if they fail to repay the loan according to the terms specified in the note. Graduation timelines or employment post-graduation are not standard conditions for loan repayment.

Question 7

Lon borrows funds through the U.S. Department of Education (DOE)to pay for his education. He defaults on the loan. DOE

Accepted Answer

The U.S. Department of Education (DOE) has the authority to take various actions to collect on defaulted student loans without needing a court order. This includes keeping the debtor's tax refund, garnishing the debtor's paycheck, and taking the debtor's federal benefits.

Question 8

Maria borrows funds through the U.S. Department of Education (DOE)to pay for her education. She defaults on the loan. In some states

Accepted Answer

The answer of Maria borrows funds through the U.S. Department...

Question 9

Olivia borrows $25,000 from the U.S. Department of Education to help pay for her education at Public University. She signs a note payable to DOE for the amount of the loan plus interest. The loan may be canceled if she is

Accepted Answer

Certain types of federal student loans can be canceled or forgiven for individuals who take jobs in public service, including teaching in certain conditions, military service, or specific roles in healthcare such as a medical technician. Each of these professions may qualify under different forgiveness programs offered by the U.S. Department of Education.

Question 10

Rita borrows $20,000 from the U.S. Department of Education to help pay for her education at State University. She signs a note payable to DOE for the amount of the loan plus interest. The loan may be discharged if

Accepted Answer

Discharging student loans in bankruptcy is difficult but possible if the borrower can prove that repaying the loan would cause undue hardship. Options A and B are not standard conditions for the discharge of student loans by the U.S. Department of Education.

Quiz 54: Creditors Rights and Bankruptcy