Question 1

Laurel defaults on a loan owed to Maverick Bank.As a creditor,Maverick may attempt to place liens on all of Laurel's property except
A)motor vehicles used to commute to work.
B)stock in various corporations.
C)items that Laurel selects.
D)vacant commercial property.

Accepted Answer

According to most state laws, creditors cannot place liens on property that is necessary for the debtor's livelihood, and motor vehicles used for commuting to work generally fall under this category. Therefore, Maverick Bank cannot place a lien on Laurel's motor vehicles used for commuting to work. However, stock in corporations, items that Laurel selects, and vacant commercial property can all potentially be subject to a lien.

Question 2

Speedy Delivery Company buys a white van from Tom's Terrific Vehicles,on credit under a guaranty signed by Ulysses,Speedy's president,making him personally liable if Speedy does not pay.Ulysses is
A)a surety.
B)a lienor.
C)a guarantor.
D)a creditor.

Accepted Answer

Ulysses is a guarantor, as he has signed a guarantee agreeing to be personally liable if Speedy Delivery Company fails to pay for the white van they purchased from Tom's Terrific Vehicles.

Question 3

Sydney borrows money from Rite Now Loan Company.For Rite Now to obtain a writ of execu?tion,Sydney must
A)be unable or refuse to pay the amount of a judgment.
B)be unable to redeem Sydney's exempt property.
C)notify Rite Now in writing (in a "writ")of his intent.
D)surrender possession of his property to a court.

Accepted Answer

A writ of execution is obtained when the debtor is unable or refuses to pay the amount of a judgment. This allows the creditor to collect the debt through forced sale of assets or garnishment of wages. The other options are not necessary for obtaining a writ of execution.

Question 4

Pruit performs a contract with Quint to reshingle the roof on Quint's house,but Quint does not pay.Pruit notifies Quint that the property will be sold to satisfy the debt.This is
A)a judicial lien.
B)a mechanic's lien.
C)an artisan's lien.
D)a violation of most state laws.

Accepted Answer

This is a mechanic's lien, which allows a contractor or supplier to place a claim on a property in order to secure payment for work or materials provided. In some states, such liens are required by law and provide contractors with a means of recourse if they are not paid for their services. However, it is important to follow the proper legal procedures when placing a lien on a property, and violating these laws could result in legal consequences.

Question 5

Delia refuses to pay Ewing $500 in cash on their contract to repair certain theater sets,which Ewing still possesses.Ewing's lien on the sets will terminate
A)if Ewing continues to maintain possession.
B)if Ewing does not file a written notice of lien within thirty days.
C)if Ewing voluntarily surrenders possession.
D)within thirty days.

Accepted Answer

According to the scenario, Delia refuses to pay Ewing $500 in cash on their contract to repair certain theater sets, which Ewing still possesses. In such a scenario, Ewing's lien on the sets will terminate if he voluntarily surrenders possession of the theater sets.

Question 6

Rita is a surety for Serena's loan from Title Lenders,Inc.Rita's right to "step into the shoes" of Title Lenders,after paying Serena's debt,and ex?er?cise any of the Title Lenders's rights against Serena is the right of
A)contribution.
B)redemption.
C)reimbursement.
D)subrogation.

Accepted Answer

Subrogation is the right of the surety to step into the shoes of the creditor and receive all the rights and privileges that the creditor had against the debtor. In this scenario, Rita can pay off Serena's debt to Title Lenders, and then exercise Title Lenders' rights against Serena, such as demanding repayment of the loan. Therefore, subrogation is the correct answer.

Question 7

Doral,Eduard,and Francesca are co-sureties of Glenda's debt to Hi-Credit Company.Doral pays Glenda's entire debt.Doral's right to seek proportionate pay?ments from Eduard and Francesca is the right of
A)contribution.
B)redemption.
C)reimbursement.
D)subrogation.

Accepted Answer

Doral's right to seek proportionate payments from Eduard and Francesca is the right of contribution. Contribution arises when two or more persons are equally responsible for a debt or obligation. In such cases, one co-surety who has paid more than their share of the debt is entitled to seek reimbursement or contribution from the other co-sureties for their proportionate share of the payment made.

Question 8

Diego performs a contract with Elwood to add a swimming pool to Elwood's property,but Elwood does not pay.Diego can file a lien on Elwood's property if,from the last date labor or materials were provided,he acts
A)immediately.
B)within 60 to 120 days.
C)within two years.
D)within a reasonable time.

Accepted Answer

In most states, the timeframe for filing a lien is between 60 to 120 days from the last date labor or materials were provided. This timeframe can vary somewhat by state, but B is the most accurate choice.

Question 9

Residence Painting Company has a claim against Stuart's property to satisfy a debt that takes priority over other claims against the same property.This is
A)a lien.
B)a violation of most state laws.
C)a writ of attachment.
D)a garnishment.

Accepted Answer

A lien is a legal claim against a property to secure payment of a debt or obligation. In this case, Residence Painting Company has a lien on Stuart's property to satisfy a debt that takes priority over other claims against the same property. This is a common practice in many states and is generally legal as long as it follows specific guidelines and procedures.

Question 10

Ping's debt to Oak Furniture Warehouse is past due.Oak obtains a judgment against Ping,but Ping refuses to pay it.Oak asks the court for an order that directs the sheriff to seize and sell any of Ping's nonexempt real or personal property that is within the court's geographic jurisdiction.This is a request for
A)a writ of execution.
B)a composition agreement.
C)an order that would violate most state laws.
D)an order of garnishment.

Accepted Answer

This is a request for a writ of execution, which is a court order that allows a sheriff to seize and sell a debtor's nonexempt property to satisfy a judgment.

Question 11

Fact Pattern 28-1A
Dollar Value Motors asks Estimable Bank for a loan to increase its vehicle inventory.Estimable requires Flair,Dollar Value's president,sign a personal guaranty to pay the debt if Dollar Value defaults.Meanwhile,to buy a pick-up truck from Dollar Value,Gina asks Harper to co-sign a credit application.
-Refer to Fact Pattern 28-1A.If Flair is a guarantor,then the guaranty is re?quired to be in writing because of
A)the debtor's right of redemption.
B)the co-signer's right of contribution.
C)the creditor's transfer of possession.
D)the Statute of Frauds.

Accepted Answer

The Statute of Frauds requires certain contracts, including guaranty agreements, to be in writing to be enforceable.

Question 12

Flip's debt to George is past due.George brings a legal action against Flip to collect the debt.George asks the court to order Home Bank,in which Flip has an account,to pay a portion of the funds to George.This is a request for
A)a writ of execution.
B)an order of garnishment.
C)an order that would violate most state laws.
D)an artisan's lien.

Accepted Answer

George is requesting an order of garnishment, which is a legal process by which a third party (in this case, Home Bank) is ordered to withhold funds from the debtor's account and pay them directly to the creditor (George) in satisfaction of a debt. Writ of execution and artisan's lien are not applicable in this situation, and the idea that the court order would violate state laws is not supported by the information given.

Question 13

Fact Pattern 28-1A
Dollar Value Motors asks Estimable Bank for a loan to increase its vehicle inventory.Estimable requires Flair,Dollar Value's president,sign a personal guaranty to pay the debt if Dollar Value defaults.Meanwhile,to buy a pick-up truck from Dollar Value,Gina asks Harper to co-sign a credit application.
-Refer to Fact Pattern 28-1A.If Harper signs the application but fails to con?di?tion her signature on Dollar Value's agreement to pursue its legal remedies against Gina before looking to her,then Harper is
A)a surety.
B)a lienor.
C)a guarantor.
D)a creditor.

Accepted Answer

The answer of Fact Pattern 28-1A
Dollar Value Motors asks Estimable...

Question 14

Kyla's debt to Lark is past due.Lark obtains an order of garnishment to require Kyla's employer My Pi Pizza Restaurant to pay part of Kyla's paycheck to Lark.The law
A)limits the amount that can be taken from Kyla's take-home pay.
B)permits My Pi to dismiss Kyla because her wages are garnished.
C)practically does not allow Lark to collect the awarded amount.
D)requires My Pi to retain Kyla as an employee until the debt is paid.

Accepted Answer

The law limits the amount that can be taken from Kyla's take-home pay to ensure that she still has enough money to support herself and her dependents. My Pi cannot dismiss Kyla solely because her wages are being garnished, as that would be illegal discrimination. The law does not prohibit Lark from collecting the awarded amount, although it may be difficult if Kyla does not have sufficient income or assets to satisfy the debt. My Pi is not required to retain Kyla as an employee until the debt is paid, but they must comply with the garnishment order unless they have a valid legal objection.

Question 15

Ronda's debt to Skye is past due.Skye brings a legal action against Ronda to collect the debt.To ensure that a judgment in Skye's favor will be collectible,Skye asks the court to order the seizure of Ronda's property.Exempt from such an order in most states would be
A)all of Ronda's real property.
B)as much of Ronda's real property as Ronda opts to exempt.
C)none of Ronda's real property.
D)Ronda's family home in its entirety or up to a specified amount.

Accepted Answer

Most states have homestead exemptions that protect a portion of a debtor's primary residence from seizure by creditors. Therefore, Ronda's family home may be exempt from the court order to seize her property, either in its entirety or up to a certain amount depending on state law. However, Ronda's other real property may not be exempt from seizure.

Question 16

Fact Pattern 28-1A
Dollar Value Motors asks Estimable Bank for a loan to increase its vehicle inventory.Estimable requires Flair,Dollar Value's president,sign a personal guaranty to pay the debt if Dollar Value defaults.Meanwhile,to buy a pick-up truck from Dollar Value,Gina asks Harper to co-sign a credit application.
-Refer to Fact Pattern 28-1A.If,after the loan agreement is signed,Gina agrees to a higher rate of interest without telling Harper,then Harper is
A)discharged from the agreement.
B)liable at the higher rate of interest.
C)liable at the lower rate of interest.
D)liable for the principal only.

Accepted Answer

The answer of Fact Pattern 28-1A
Dollar Value Motors asks Estimable...

Question 17

Francie's debt to Gage is past due.Gage brings a legal action against Francie to collect the debt.To ensure that a judgment in Gage's favor will be collectible,Gage asks the court to order the seizure of Francie's property.This is a request for
A)a guaranty (or suretyship)contract.
B)an order that would violate most state laws.
C)a writ of attachment.
D)an order of receivership.

Accepted Answer

Gage is requesting a writ of attachment, which is an order from the court authorizing the seizure of Francie's property to collect the debt. This is a common legal remedy to ensure that a judgment in favor of the creditor will be collectible. Option A, a guaranty contract, is not relevant to the situation. Option B, an order that violates state laws, is not a legitimate request. Option D, an order of receivership, would involve the appointment of a third party to manage Francie's assets, and is a more extreme measure that would likely only be used if Francie was unable to manage or protect her own property.

Question 18

Liu and Midge-Nero's creditors-contract with Nero for the discharge of Nero's liquidated debts on payment of a lesser sum.This is
A)a composition agreement.
B)a subrogation.
C)a suretyship agreement.
D)in violation of most states' laws.

Accepted Answer

This is a composition agreement where the creditors agree to discharge Nero's liquidated debts on payment of a lesser sum. It is a common practice in business transactions where the debtor is unable to pay the full amount owed to the creditors.

Question 19

Fact Pattern 28-1A
Dollar Value Motors asks Estimable Bank for a loan to increase its vehicle inventory.Estimable requires Flair,Dollar Value's president,sign a personal guaranty to pay the debt if Dollar Value defaults.Meanwhile,to buy a pick-up truck from Dollar Value,Gina asks Harper to co-sign a credit application.
-Refer to Fact Pattern 28-1A.If Harper signs the application only after lan?guage is included that requires Dollar Value to exhaust its legal remedies against Gina before looking to her,then Harper is
A)a surety.
B)a lienor.
C)a guarantor.
D)a creditor.

Accepted Answer

By signing the credit application with the requirement that Dollar Value exhaust its legal remedies against Gina before looking to Harper, Harper is acting as a guarantor. A guarantor is someone who agrees to pay back a debt if the original borrower defaults, but only after the creditor has attempted to collect from the borrower first.

Question 20

Rosa and Sally agree to guarantee Timon's debt.Rosa's maximum liabil?ity is $30,000,and Sally's is $20,000.Timon owes $20,000 and is in default.Rosa pays the creditor the entire amount.In the ab?sence of an agree?ment to the contrary,Rosa can recover from Sally
A)$8,000.
B)$10,000.
C)$20,000.
D)0.

Accepted Answer

The answer of Rosa and Sally agree to guarantee Timon's...

Quiz 28: B: Creditors Rights and Remedies

Laurel defaults on a loan owed to Maverick Bank.As a creditor,Maverick may attempt to place liens on all of Laurel's property except

Speedy Delivery Company buys a white van from Tom's Terrific Vehicles,on credit under a guaranty signed by Ulysses,Speedy's president,making him personally liable if Speedy does not pay.Ulysses is

Sydney borrows money from Rite Now Loan Company.For Rite Now to obtain a writ of execu?tion,Sydney must

Pruit performs a contract with Quint to reshingle the roof on Quint's house,but Quint does not pay.Pruit notifies Quint that the property will be sold to satisfy the debt.This is

Delia refuses to pay Ewing $500 in cash on their contract to repair certain theater sets,which Ewing still possesses.Ewing's lien on the sets will terminate

Rita is a surety for Serena's loan from Title Lenders,Inc.Rita's right to "step into the shoes" of Title Lenders,after paying Serena's debt,and ex?er?cise any of the Title Lenders's rights against Serena is the right of

Doral,Eduard,and Francesca are co-sureties of Glenda's debt to Hi-Credit Company.Doral pays Glenda's entire debt.Doral's right to seek proportionate pay?ments from Eduard and Francesca is the right of

Diego performs a contract with Elwood to add a swimming pool to Elwood's property,but Elwood does not pay.Diego can file a lien on Elwood's property if,from the last date labor or materials were provided,he acts

Residence Painting Company has a claim against Stuart's property to satisfy a debt that takes priority over other claims against the same property.This is

Flip's debt to George is past due.George brings a legal action against Flip to collect the debt.George asks the court to order Home Bank,in which Flip has an account,to pay a portion of the funds to George.This is a request for

Kyla's debt to Lark is past due.Lark obtains an order of garnishment to require Kyla's employer My Pi Pizza Restaurant to pay part of Kyla's paycheck to Lark.The law

Ronda's debt to Skye is past due.Skye brings a legal action against Ronda to collect the debt.To ensure that a judgment in Skye's favor will be collectible,Skye asks the court to order the seizure of Ronda's property.Exempt from such an order in most states would be

Francie's debt to Gage is past due.Gage brings a legal action against Francie to collect the debt.To ensure that a judgment in Gage's favor will be collectible,Gage asks the court to order the seizure of Francie's property.This is a request for

Liu and Midge-Nero's creditors-contract with Nero for the discharge of Nero's liquidated debts on payment of a lesser sum.This is

Rosa and Sally agree to guarantee Timon's debt.Rosa's maximum liabil?ity is $30,000,and Sally's is $20,000.Timon owes $20,000 and is in default.Rosa pays the creditor the entire amount.In the ab?sence of an agree?ment to the contrary,Rosa can recover from Sally