Exam 29: Creditors Rights and Remedies

Fact Pattern 29-2 Robin's home is in a state that has a $30,000 homestead exemption. Robin defaults on a $60,000 debt that she owes to Suburban Mortgage Company. Robin's home is sold at auction for $80,000. -Refer to Fact Pattern 29-2. Robin will receive​

There is no limit to the amount that can be taken from a debtor's weekly take-home pay through garnishment.

Jay is a surety for Karen's loan from Little Bank. Jay's right to be reimbursed by Karen after having paid her debt is the right of​

Fact Pattern 29-1 Petro Oil Refinery asks Quality Bank for a loan to increase its oil inventory. Quality requires Robin, Petro's president, sign a personal guaranty to pay the debt if Petro defaults. Meanwhile, to sell fifty barrels of refined oil to Slick Lubricants, Inc., Petro asks its outside accountant Tina to co-sign a credit application. -Refer to Fact Pattern 29-1. If Tina signs the application but fails to condition her signature on Petro's agreement to pursue its legal remedies against Slick before looking to her, then Tina is​

A short sale is a sale of only part of the whole property subject to a mortgage.

A guarantor is secondarily liable on an obligation.

Bert, Chaka, and Doug are co-sureties of Erica's debt to Finance Loan Company. Bert pays Erica's entire debt. Bert's right to seek proportionate payments from Chaka and Doug is the right of​

​Countryside Bank provides Dhani with a standard mortgage with an unchanging rate of interest to buy a home. Payments on the loan remain the same for the duration of the mortgage. This is

Denise borrows $90,000 from Clear Lake Credit Union to buy a home. Denise loses her job and fails to make payments on the mortgage, but assures Clear Lake Credit that she will soon secure a new job. The lender agrees to postpone the payments. This is​

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

Raoul is a surety for Suzie's loan from Turnkey Credit, Inc. Raoul's right to "step into the shoes" of Turnkey, after paying Suzie's debt, and exercise any of the Turnkey's rights against Suzie is the right of​

Olive borrows money from Capital Loan Company. For Capital to obtain a writ of execution, Olive must​

Foreclosure is the legal process by which a lender repossesses and auctions off property that has secured a loan.

Federal law alone governs garnishment actions.

Fact Pattern 29-2 Robin's home is in a state that has a $30,000 homestead exemption. Robin defaults on a $60,000 debt that she owes to Suburban Mortgage Company. Robin's home is sold at auction for $80,000. -Refer to Fact Pattern 29-2. Suburban Mortgage may recover​

George borrows funds from Hometown Credit Union (HCU) to buy real property. George signs a written instrument that gives HCU an interest in the property as security for the debt's payment. This is​

If a homeowner defaults, or fails to make the mortgage payments, the lender loses the right to foreclose on the mortgaged property.

Fact Pattern 29-1 Petro Oil Refinery asks Quality Bank for a loan to increase its oil inventory. Quality requires Robin, Petro's president, sign a personal guaranty to pay the debt if Petro defaults. Meanwhile, to sell fifty barrels of refined oil to Slick Lubricants, Inc., Petro asks its outside accountant Tina to co-sign a credit application. -Refer to Fact Pattern 29-1. If Robin is a guarantor, then the guaranty is required to be in writing because of​

Liquidated debts are debts that are indefinite, or not fixed, in amount.

Recording a mortgage perfects the lender's security interest in the mortgaged property.