Exam 19: Creditors Rights and Remedies

Rico borrows $110,000 from Sterling Bank to buy a home. If he fails to make payments on the mortgage, the bank has the right to repossess and auction off the property securing the loan. This is​

Refer to Fact Pattern 19-2.If Suburban Mortgage recovers less than it is owed, it can realize the difference from​

An employer can dismiss an employee because his or her wages are being garnished.

EZ Credit, Inc., lends $1,000 to Joe. Kay acts as Joe's surety. If Kay pays the loan, she gets​

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

Helen's debt to Imprint Printers is past due. Imprint obtains a judgment against Helen, but she refuses to pay it. Imprint asks the court for an order that directs the sheriff to seize and sell any of Helen's nonexempt real or personal property that is within the court's geographic jurisdiction. This is a request for​

Refer to Fact Pattern 19-2.Robin will receive​

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

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

Fact Pattern 19-1 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 19-1.If, after the loan agreement is signed, Slick agrees to a higher rate of interest without telling Tina, then Tina is​

Federal law alone governs garnishment actions.

A surety cannot assert the principal debtor's bankruptcy as a defense to avoid liability on the debtor's obligation.

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​

Portia owes Bjorn $500 on their roof repair contract, but refuses to pay. To collect, Bjorn files a mechanic's lien. Under a mechanic's lien, security for the debt is represented by​

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​

Dan defaults on a debt to Rachel. Rachel will not be able to recover the debt from​

Daphne defaults on a debt to Country Loan Corporation. As a creditor, Country Loan can place liens on all of Daphne's property except​

Fact Pattern 19-2 Robin's home is in a state that has a $30,000 homestead exemption. Robin de-faults 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 19-2.Suburban Mortgage may recover​

A court's order to seize a debtor's property after a judgment is referred to as a writ of execution.

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​