Exam 32: Credit and Security

The method by which a secured party obtains a priority interest in a debtor's collateral is attachment.

Any payment of the principal obligation by the debtor will discharge the surety or the guarantor from the obligation.

To create an enforceable security interest between Finance Corporation and Global Trade Inc. with a written security agreement, the agreement must contain a description of

An artisan's lien exists as long as the debtor maintains possession of the goods.

When a debtor defaults, a secured party who does not choose to retain the collateral must give it back to the debtor in exchange for cash.

Loan Company has a security interest against Manufacturing Inc. that is enforceable. In other words, with respect to the collateral, Loan's rights are

Consumer Credit, Inc. (CCI), lends $1,000 to Dave. Eve acts as Dave's surety.  If Eve pays the loan, she gets

A third party who agrees to be primarily responsible for the debt of another is a guarantor.

Greg borrows funds from Home Bank secured by Greg's car. Greg defaults on the debt. Home Bank's options include

A creditor can demand payment from the surety from the moment that the debt is due.

Reese applies for a credit card at Sell-Mart. The application gives Sell-Mart a security interest in any goods that Reese buys with the card until she pays for them in full. In this situation, the secured party is

A guarantor has a right of reimbursement for any payments the guarantor made on the debt.