Exam 28: Creditors Rights and Remedies

Fact Pattern 28-2B Rico signs a lease on behalf of Start-Up, Inc., with Town Properties Corporation. As part of the lease, Rico signs a document titled "GUARANTY," which states that it is "an absolute guaranty" of the lease's performance. -Refer to Fact Pattern 28-2B. If Start-Up stops paying the rent, it is most likely that li?ability or loss for the unpaid amount will rest with

Suha performs a contract with Tyler to add a second story addition to Tyler's house, but Tyler does not pay. In most states, Suha can create a lien and place it on Tyler's property by filing

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

If a surety pays the debt owed to a creditor, then the surety acquires any rights that the creditor had against the debtor.

Larry borrows money from Joan. To use a writ of execu?tion as a remedy, Joan must first

A debtor's car may be exempt from satisfaction of a judgment debt.

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

A surety is released from his or her obligation if a debtor cannot pay a debt.

If the debtor offers to pay the debt owed to a creditor but the creditor re?fuses the tender, the surety remains obligated on the debt.

Kwik Delivery Company buys a truck from Lucky Vehicles, Inc., under a guaranty signed by Mina, Kwik's president, who writes "President" after her signature. When Kwik does not pay for the truck, Lucky sues Mina, who claims that she did not intend to be bound by the guaranty. The court would most likely rule in favor of

A mortgagee has the right to seek a judicial sale of prop?erty on a mortgagor's default.

A surety can use any defenses available to a debtor to avoid liability on the obligation to the creditor.

Drew and Earl are brothers. They agree to act as guarantors on a loan made by their sister, Flo. Flo defaults on the payments and Drew re?fuses to pay. Earl pays the debt. Earl can recover from

An attachment is a court-ordered seizure and taking into custody of prop?erty prior to the securing of a judgment for a past-due debt.

A creditor's extension of time to a debtor for making payment, without the consent of the surety, will not discharge the surety.

Khali's debt to Lew is past due. Lew obtains a judgment against Khali to collect the debt, but Khali refuses to pay. Lew asks the court to order Khali's employer to pay a portion of Khali's paycheck to Lew. This is a request for

To use attachment as a remedy, a creditor must have possession (be "attached" to) of a debtor's property.

A guaranty contract must be in writing to be enforceable.

Rita is a surety for Sue's loan from Total Finance Company. Rita's right to "step into the shoes" of Total Finance, after paying Sue's debt, and ex?er?cise any of the Total Finance's rights against Sue is the right of

If a debtor will not pay a judgment, a creditor can only resort to "self-help" to collect.