Exam 28: A: Creditors Rights and Remedies

Urbana performs a contract with Virgil to add a sun porch to Virgil's house,but Virgil does not pay.In most states,Urbana can create a lien and place it on Virgil's property by filing

Bill and Cody agree to guarantee Wyatt's debt.Bill's maximum liabil?ity is $60,000,and Cody's is $40,000.Wyatt owes $40,000 and is in default.Bill pays the creditor the entire amount.In the ab?sence of an agree?ment to the contrary,Bill can recover from Cody

Fact Pattern 28-4B 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 28-4B.Nina may recover

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

Each state permits a debtor to retain the family home,in its entirety or in part,free from the claims of unsecured creditors.

Fact Pattern 28-2B Rico signs a lease on behalf of Start-Up Games,Inc. ,with Tower Office Suites.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

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

Creditors may not contract with a debtor for payment of a sum less than that owed.

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

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

Fact Pattern 28-1B Chocolate! Chocolate! Corporation is a new company that needs to borrow money to meet its payroll.Dayna,president and owner of Chocolate! Chocolate!,asks Evermore Credit Union to loan the funds to Chocolate! Chocolate! -Refer to Fact Pattern 28-1B.Generally,for a contract between Evermore and Dayna with respect to liability for Chocolate! Chocolate!'s loan to be enforceable,it must be in writing if Dayna is

A writ of execution is a court order to execute a debtor after the entry of a final judgment in a creditor's lawsuit against the debtor.

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

Making any material modification in the terms of a debtor's contract,without the consent of the surety,will not discharge the surety's obligation.

Loni delivers her Mazda to be repaired at Nile's Body Shop.Loni agrees to pay cash.Nile performs,but Loni does not pay.Nile tells Loni that he will keep the car until she pays.This is

When a person contracts for improvements on real property but does not immediately pay for the improvements,the creditor can place a mechanic's lien on the property.

A guarantor can assert the principal debtor's bankruptcy as a defense to avoid liability on the obligation.

The distinctions between a surety and a guarantor are recognized in all states.

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

The law protects debtors as well as creditors.