Question 1

A guarantor can be required to pay an obligation only after the principal debtor defaults.

Accepted Answer

A) True 
 B)False

Question 2

In a few states, statutes allow the homestead exemption only if the judgment debtor has a family.

Accepted Answer

A) True 
 B)False

Question 3

A surety is primarily liable for the debt of a principal.

Accepted Answer

A) True 
 B)False

Question 4

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

Accepted Answer

A)  a writ of execution.​ 
B)  ​an order of garnishment. 
C)  ​an order that would violate most state laws. 
D)  ​a composition agreement. 
A)  a writ of execution.​ 
B)  ​an order of garnishment. 
C)  ​an order that would violate most state laws. 
D)  ​a composition agreement.

Question 5

In some states, a judgment creditor must obtain a separate order of garnishment to cover each of the debtor's pay periods.

Accepted Answer

A) True 
 B)False

Question 6

A guaranty contract must normally be in writing to be enforceable.

Accepted Answer

A) True 
 B)False

Question 7

Frank performs a contract with Gene to add a garage to Gene's property, but Gene does not pay. Frank can file a lien on Gene's property if, from the last date labor or materials were provided, he acts​

Accepted Answer

A)  ​immediately. 
B)  ​within 60 to 120 days. 
C)  ​within two years. 
D)  ​within a reasonable time. 
A)  ​immediately. 
B)  ​within 60 to 120 days. 
C)  ​within two years. 
D)  ​within a reasonable time.

Question 8

A lien is an encumbrance on property to satisfy a debt or protect a claim for the payment of a debt.​

Accepted Answer

A) True 
 B)False

Question 9

A default occurs when a debtor fails to pay a creditor as promised.

Accepted Answer

A) True 
 B)False

Question 10

Rashi is a student at State University. In need of funds to pay for tuition and books, Rashi asks Tiempo Loans, Inc., for a short-term loan. The lender agrees to make a loan if Rashi will have someone who is financially responsible guarantee the loan payments. Umberto, a well-known businessperson and a friend of Rashi's family, calls Tiempo and agrees to pay the loan if Rashi cannot. Because of Umberto's reputation, the loan is made. Rashi is making the payments, but because of illness he is unable to work for one month. He asks Tiempo to extend the loan for three months. The lender agrees, raising the interest rate for the extended period. Umberto is not notified of the extension (and thus does not consent to it). One month later, Rashi drops out of school. All attempts to collect the remainder of the loan from Rashi fail. Can Tiempo assert a claim against Umberto on the debt?

Accepted Answer

Tiempo cannot hold Umberto liable for tw

Question 11

Julie owes Ryan $10,000. When the debt comes due, Julie refuses to pay. Ryan obtains a judgment to collect the debt. Using a writ of execution, the court orders the sheriff to seize Julie's boat and sell it to pay the debt. The boat sells for $15,000. Ryan will receive​

Accepted Answer

A)  ​$15,000. 
B)  ​$10,000. 
C)  ​$7,500. 
D)  ​$15,000 minus the collection costs. 
A)  ​$15,000. 
B)  ​$10,000. 
C)  ​$7,500. 
D)  ​$15,000 minus the collection costs.

Question 12

Edie fraudulently induces Franco, a consumer, to sign a promissory note to buy a speedboat. Edie sells the note to Gus, who takes it for value, in good faith, and without knowledge of the fraud. With respect to the defense against payment on the note to Edie, Franco can​

Accepted Answer

A)  ​assert this defense against Gus. 
B)  ​file for a property exemption. 
C)  ​exercise the right of subrogation. 
D)  ​obtain a deficiency judgment. 
A)  ​assert this defense against Gus. 
B)  ​file for a property exemption. 
C)  ​exercise the right of subrogation. 
D)  ​obtain a deficiency judgment.

Exam 29: Creditors Rights and Remedies

A guarantor can be required to pay an obligation only after the principal debtor defaults.

In a few states, statutes allow the homestead exemption only if the judgment debtor has a family.

A surety is primarily liable for the debt of a principal.

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

In some states, a judgment creditor must obtain a separate order of garnishment to cover each of the debtor's pay periods.

A guaranty contract must normally be in writing to be enforceable.

Frank performs a contract with Gene to add a garage to Gene's property, but Gene does not pay. Frank can file a lien on Gene's property if, from the last date labor or materials were provided, he acts​

A lien is an encumbrance on property to satisfy a debt or protect a claim for the payment of a debt.​

A default occurs when a debtor fails to pay a creditor as promised.

Julie owes Ryan $10,000. When the debt comes due, Julie refuses to pay. Ryan obtains a judgment to collect the debt. Using a writ of execution, the court orders the sheriff to seize Julie's boat and sell it to pay the debt. The boat sells for $15,000. Ryan will receive​

Edie fraudulently induces Franco, a consumer, to sign a promissory note to buy a speedboat. Edie sells the note to Gus, who takes it for value, in good faith, and without knowledge of the fraud. With respect to the defense against payment on the note to Edie, Franco can​

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

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

A lien is an encumbrance on property to satisfy a debt or protect a claim for the payment of a debt.

Julie owes Ryan $10,000. When the debt comes due, Julie refuses to pay. Ryan obtains a judgment to collect the debt. Using a writ of execution, the court orders the sheriff to seize Julie's boat and sell it to pay the debt. The boat sells for $15,000. Ryan will receive

Edie fraudulently induces Franco, a consumer, to sign a promissory note to buy a speedboat. Edie sells the note to Gus, who takes it for value, in good faith, and without knowledge of the fraud. With respect to the defense against payment on the note to Edie, Franco can