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Exam 29: Creditors Rights and Remedies

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Question 31

Multiple Choice

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To make a sale to Gourmet Inc., Hill Valley Commodities asks Gourmet's outside accountant Ingre to co-sign a credit application. According to the terms, if Gourmet defaults, Hill Valley can look to Ingre for payment without first pursuing legal remedies against Gourmet. Ingre is

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

E) C) and D)
F) A) and D)

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Question 32

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When a co-surety pays more than his or her proportionate share on a debtor's default, he or she is entitled to recover from the debtor the excess amount paid.

A) True
B) False

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Question 33

Multiple Choice

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To buy a townhouse, Becky obtains a mortgage loan from Countywide Bank. The lender should record the mortgage to

Because the homestead exemption interacts with other areas of the law that relate to creditors' rights and remedies, it can sometime operate to cancel out

Personal property that is most often exempt from satisfaction of judgment debts does not include a vehicle for transportation.

To purchase a farmhouse, Clay obtains a mortgage loan from Debit Bank. Clay defaults on the payments on the loan. The bank has

Mortgage loans are contracts.

Coastal Bank agrees to lend Dobie the funds to buy a beach house. The loan has an unchanging rate of interest-the amount of each payment will be the same for the duration of the loan. In this deal, the borrower is

A short sale is a sale of property for less than the balance due on a mortgage loan.

Because a writ of attachment is a prejudgment remedy, a debtor does not need to be given notice and an opportunity to be heard before the property is seized.

No state allows a defaulting borrower to repurchase the property after a judicial foreclosure sale.

Construction Company has a claim against Diners Café to satisfy a debt that takes priority over other claims against the same property. This is

Carly defaults on a debt to Debit Loans. As a creditor, Debit can satisfy a judgment debt on the default from all of Carly's property except

A guarantor is entitled to receive from the debtor all outlays made on behalf of the guaranty arrangement.

Brew Pub Company's debt to Credit Service is past due. Credit obtains a judgment against Brew, but the firm refuses to pay. Credit asks the court to order the seizure of Brew's property. This is a request for

Coco and Delany borrow $110,000 from Employees Credit Union to buy a home. The loan is a fixed-rate mortgage at 3.38 percent with a thirty-year term, subject to an acceleration clause, and secured by the home. When the borrowers have paid off $10,000 of the mortgage-still owing $100,000, plus interest-they stop making payments. Meanwhile, the home's market value declines to $85,000. After six months, the lender decides to take steps to recover the unpaid amount of the loan. What are the lender's options? Which option seems most likely? Why? What steps are involved?

In a few states, if a judgment debtor does not have a family, a creditor may be entitled to collect the full amount realized from the sale of the debtor's home.

The borrower is typically required to pay all property taxes, assessments, and other claims against the property.

Today, there is no significant difference in the liability of a surety and a guarantor in any state at common law or otherwise.

A mortgage gives a creditor a lien on a debtor's real property as security for payment of a debt.