Exam 28: Creditors Rights and Remedies

A surety is primarily liable on an obliga?tion.

Fact Pattern 28-3B Mary's home is in a state that has a $30,000 homestead exemption. Mary de?faults on a $60,000 debt that she owes to Nina. Mary's home is sold at auc?tion for $80,000. -Refer to Fact Pattern 28-3B. Nina may recover

Bret defaults on a loan owed to City Bank. As a creditor, City Bank may attempt to place liens on all of Bret's property except

Donald's debt to Everett is past due. Everett brings a legal action against Donald to collect the debt. To ensure that a judgment in Everett's favor will be collectible, Everett asks the court to order the seizure of Donald's property. This is a request for

Fact Pattern 28-1B Beta Software Corporation is a new company that needs to borrow money to meet its payroll. Cliff, president and owner of Beta, asks First National Bank to loan Beta the funds. -Refer to Fact Pattern 28-1B. Generally, for a contract between First National and Cliff with respect to liability for Beta's loan to be enforceable, it must be in writing if Cliff is

Before the guarantor of a debt can be required to answer for the debt of a debtor, the debtor must have defaulted on the underlying obligation.

Delia refuses to pay Ewing $500 in cash on their contract to repair certain theater sets, which Ewing still possesses. Ewing's lien on the sets will terminate

A contractor who makes improvements to real property, but who is not paid for the work, may place a mechanic's lien on the property.

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

Smartt Software Company borrows $10,000 from Term 'N All Loans, Inc., but cannot repay the loan when it comes due. Term 'N All refuses to ex?tend the time for repayment unless Smartt can provide an acceptable surety. Uno Venture Corporation agrees to act as a surety for the loan af?ter Smartt offers the firm a discount on software and shows Uno financial statements, compiled with Term 'N All's assistance, that misrepresent Smartt's financial situation. Later, after Uno uses the discount to buy software, Smartt again defaults on repayment of the loan, and Term 'N All files a suit against Uno to collect the amount of the debt. Is Uno liable? Why or why not?

Ian's mortgage debt to Jeff is past due. Jeff brings a legal action against Ian to collect the debt. Jeff asks the court to order the sale of the mortgaged property and the payment of a portion of the proceeds to Jeff. This is a request for

Dolf borrows money from Elin. Dolf defaults. To use attachment as a remedy, Elin must first

Subrogation refers to the priority of more than one creditor to satisfaction of judgment debts from a debtor's property.

Rhonda's debt to Skyler is past due. Skyler brings a legal action against A to collect the debt. To ensure that a judgment in Skyler's favor will be collectible, Skyler asks the court to order the seizure of Rhonda's property. Exempt from such an order in most states would be

Ross and Sally agree to guarantee Tim's debt. Ross's maximum liabil?ity is $30,000, and Sally's is $20,000. Tim owes $20,000 and is in default. Ross pays the creditor the entire amount. In the ab?sence of an agree?ment to the contrary, Ross can recover from Sally

Liu and Midge-Nero's creditors-contract with Nero for the discharge of Nero's liquidated debts on payment of a lesser sum. This is

Fact Pattern 28-1B Beta Software Corporation is a new company that needs to borrow money to meet its payroll. Cliff, president and owner of Beta, asks First National Bank to loan Beta the funds. -Refer to Fact Pattern 28-1B. If First National insists that Cliff sign the loan applica?tion, making himself personally liable for payment whether or not Beta defaults, Cliff will be

Refer to Fact Pattern 28-2B. The reason for the result in the previous question is that

All of a debtor's pay can be gar?nished.

To foreclose on real property securing a mortgage, the mortgagee must ask a court for a deficiency judgment.