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

Wanda owes Xtra Credit Company $5,000 but refuses to pay. Xtra Credit obtains a garnishment order and serves it on Wanda's employer, Young Nursery & Garden, Inc. If Young complies with the order and Wanda stays on the job, is one order enough to garnish all of Wanda's wages for each pay period until the debt is paid

Accepted Answer

No. In some states, a creditor such as X

Question 3

Rosa and Sally agree to guarantee Timon's debt. Rosa's maximum liability is $30,000, and Sally's is $20,000. Timon owes $20,000 and is in default. Rosa pays the creditor the entire amount. In the absence of an agreement to the contrary, Rosa can recover from Sally

Accepted Answer

A)  $8,000. 
B)  $10,000. 
C)  $20,000. 
D)  0. 
A)  $8,000. 
B)  $10,000. 
C)  $20,000. 
D)  0.

Question 4

If a debtor does not pay a mechanic's lien, the debtor's property can be sold to satisfy the debt.

Accepted Answer

A) True 
 B)False

Question 5

Fact Pattern 28-1A 
Dollar Value Motors asks Estimable Bank for a loan to increase its vehicle inventory. Estimable requires Flair, Dollar Value’s president, sign a personal guaranty to pay the debt if Dollar Value defaults. Meanwhile, to buy a pick-up truck from Dollar Value, Gina asks Harper to co-sign a credit application.
-Refer to Fact Pattern 28-1A. If Harper signs the application only after language is included that requires Dollar Value to exhaust its legal remedies against Gina before looking to her, then Harper is

Accepted Answer

A)  a surety. 
B)  a lienor. 
C)  a guarantor. 
D)  a creditor. 
A)  a surety. 
B)  a lienor. 
C)  a guarantor. 
D)  a creditor.

Question 6

A guaranty contract must be in writing to be enforceable.

Accepted Answer

A) True 
 B)False

Question 7

Sydney borrows money from Rite Now Loan Company. For Rite Now to obtain a writ of execution, Sydney must

Accepted Answer

A)  be unable or refuse to pay the amount of a judgment. 
B)  be unable to redeem Sydney's exempt property. 
C)  notify Rite Now in writing (in a "writ") of his intent. 
D)  surrender possession of his property to a court. 
A)  be unable or refuse to pay the amount of a judgment. 
B)  be unable to redeem Sydney's exempt property. 
C)  notify Rite Now in writing (in a "writ") of his intent. 
D)  surrender possession of his property to a court.

Question 8

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

Accepted Answer

A) True 
 B)False

Question 9

In a suretyship relationship, a third person's credit becomes the security for a debt.

Accepted Answer

A) True 
 B)False

Question 10

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

Accepted Answer

A)  if Ewing continues to maintain possession. 
B)  if Ewing does not file a written notice of lien within thirty days. 
C)  if Ewing voluntarily surrenders possession. 
D)  within thirty days. 
A)  if Ewing continues to maintain possession. 
B)  if Ewing does not file a written notice of lien within thirty days. 
C)  if Ewing voluntarily surrenders possession. 
D)  within thirty days.

Question 11

The distinctions between a surety and a guarantor have been abolished in all states.

Accepted Answer

A) True 
 B)False

Question 12

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

Accepted Answer

A) True 
 B)False

Question 13

Doral, Eduard, and Francesca are co-sureties of Glenda's debt to Hi-Credit Company. Doral pays Glenda's entire debt. Doral's right to seek proportionate payments from Eduard and Francesca is the right of

Accepted Answer

A)  contribution. 
B)  redemption. 
C)  reimbursement. 
D)  subrogation. 
A)  contribution. 
B)  redemption. 
C)  reimbursement. 
D)  subrogation.

Question 14

Rita is a surety for Serena's loan from Title Lenders, Inc. Rita's right to "step into the shoes" of Title Lenders, after paying Serena's debt, and exercise any of the Title Lenders's rights against Serena is the right of

Accepted Answer

A)  contribution. 
B)  redemption. 
C)  reimbursement. 
D)  subrogation. 
A)  contribution. 
B)  redemption. 
C)  reimbursement. 
D)  subrogation.

Question 15

Fact Pattern 28-1A 
Dollar Value Motors asks Estimable Bank for a loan to increase its vehicle inventory. Estimable requires Flair, Dollar Value’s president, sign a personal guaranty to pay the debt if Dollar Value defaults. Meanwhile, to buy a pick-up truck from Dollar Value, Gina asks Harper to co-sign a credit application.
-Refer to Fact Pattern 28-1A. If Flair is a guarantor, then the guaranty is required to be in writing because of

Accepted Answer

A)  the debtor's right of redemption. 
B)  the co-signer's right of contribution. 
C)  the creditor's transfer of possession. 
D)  the Statute of Frauds. 
A)  the debtor's right of redemption. 
B)  the co-signer's right of contribution. 
C)  the creditor's transfer of possession. 
D)  the Statute of Frauds.

Question 16

Fact Pattern 28-1A 
Dollar Value Motors asks Estimable Bank for a loan to increase its vehicle inventory. Estimable requires Flair, Dollar Value’s president, sign a personal guaranty to pay the debt if Dollar Value defaults. Meanwhile, to buy a pick-up truck from Dollar Value, Gina asks Harper to co-sign a credit application.
-Refer to Fact Pattern 28-1A. If Harper signs the application but fails to condition her signature on Dollar Value's agreement to pursue its legal remedies against Gina before looking to her, then Harper is

Accepted Answer

A)  a surety. 
B)  a lienor. 
C)  a guarantor. 
D)  a creditor. 
A)  a surety. 
B)  a lienor. 
C)  a guarantor. 
D)  a creditor.

Question 17

Pruit performs a contract with Quint to reshingle the roof on Quint's house, but Quint does not pay. Pruit notifies Quint that the property will be sold to satisfy the debt. This is

Accepted Answer

A)  a judicial lien. 
B)  a mechanic's lien. 
C)  an artisan's lien. 
D)  a violation of most state laws. 
A)  a judicial lien. 
B)  a mechanic's lien. 
C)  an artisan's lien. 
D)  a violation of most state laws.

Question 18

Flip's debt to George is past due. George brings a legal action against Flip to collect the debt. George asks the court to order Home Bank, in which Flip has an account, to pay a portion of the funds to George. 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)  an artisan's lien. 
A)  a writ of execution. 
B)  an order of garnishment. 
C)  an order that would violate most state laws. 
D)  an artisan's lien.

Question 19

Speedy Delivery Company buys a white van from Tom's Terrific Vehicles, on credit under a guaranty signed by Ulysses, Speedy's president, making him personally liable if Speedy does not pay. Ulysses is

Accepted Answer

A)  a surety. 
B)  a lienor. 
C)  a guarantor. 
D)  a creditor. 
A)  a surety. 
B)  a lienor. 
C)  a guarantor. 
D)  a creditor.

Question 20

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

Accepted Answer

A) True 
 B)False

Exam 28: Creditors Rights and Remedies

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

Rosa and Sally agree to guarantee Timon's debt. Rosa's maximum liability is $30,000, and Sally's is $20,000. Timon owes $20,000 and is in default. Rosa pays the creditor the entire amount. In the absence of an agreement to the contrary, Rosa can recover from Sally

If a debtor does not pay a mechanic's lien, the debtor's property can be sold to satisfy the debt.

A guaranty contract must be in writing to be enforceable.

Sydney borrows money from Rite Now Loan Company. For Rite Now to obtain a writ of execution, Sydney must

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

In a suretyship relationship, a third person's credit becomes the security for a debt.

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

The distinctions between a surety and a guarantor have been abolished in all states.

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

Doral, Eduard, and Francesca are co-sureties of Glenda's debt to Hi-Credit Company. Doral pays Glenda's entire debt. Doral's right to seek proportionate payments from Eduard and Francesca is the right of

Rita is a surety for Serena's loan from Title Lenders, Inc. Rita's right to "step into the shoes" of Title Lenders, after paying Serena's debt, and exercise any of the Title Lenders's rights against Serena is the right of

Pruit performs a contract with Quint to reshingle the roof on Quint's house, but Quint does not pay. Pruit notifies Quint that the property will be sold to satisfy the debt. This is

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

Speedy Delivery Company buys a white van from Tom's Terrific Vehicles, on credit under a guaranty signed by Ulysses, Speedy's president, making him personally liable if Speedy does not pay. Ulysses is

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

Introduction to Law and Legal Reasoning

Courts and Alternative Dispute Resolution

Court Procedures

Constitutional Authority to Regulate Business

Ethics and Business Decision Making

Intentional Torts and Privacy

Negligence and Strict Liability

Intellectual Property and Internet Law

Criminal Law and Cyber Crime

Nature and Terminology

Agreement in Traditional and E-Contracts

Consideration

Capacity and Legality

Mistakes, Fraud, and Voluntary Consent

The Statute of Frauds

Third Party Rights

Performance and Discharge

Breach of Contract and Remedies

The Formation of Sales and Lease Contracts

Title, Risk, and Insurable Interest

Performance Breach of Sales Lease Contracts

Warranties and Product Liability

International Law in a Global Economy

The Function Creation of Negotiable Instruments

Transferability and Holder in Due Course

Liability, Defenses, and Discharge

Checks and Banking in the Digital Age

Secured Transactions

Bankruptcy Law

Mortgages Foreclosures After the Recession

Agency Formation and Duties

Agency Liability and Termination

Employment, Immigration, and Labor Law

Employment Discrimination

Sole Proprietorships and Franchises

Partnerships and Limited Liability Partnerships

Limited Liability Companies Special Business Forms

Corporate Formation and Financing

Corporate Directors, Officers, Shareholders

Corporate Merger, Consolidation, Termination

Securities Law Corporate Governance

Law for Small Business

Administrative Law

Consumer Law

Environmental Law

Antitrust Law

Professional Liaility and Accountability

Personal Property and Bailments

Real Property Landlord-Tenant Relationships

Insurance

Wills and Trusts

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