Rod was required to pledge his house and car as collateral for a loan he received from the First National Bank. The money from the loan was used to start his new business, which unfortunately failed within 6 months. The bank can now claim Rod's house and car to satisfy its claim.

Question

Quizplus · Accepted Answer

When Rod pledged his house and car as collateral for the loan, he gave the bank the right to claim them if he fails to pay back the loan. Since his business failed and he cannot pay back the loan, the bank has the legal right to claim his house and car to recover its money.

Rod Was Required to Pledge His House and Car as Collateral