Question 1

If a surety or guarantor pays the debtor's obligation to the creditor,the surety or guarantor has a right to ______,which means that the surety or guarantor is entitled to all the rights that the creditor had against the debtor.

Accepted Answer

A)   Subrogation
B)   Reimbursement
C)   Contribution
D)   Recoupment
E)   SecurementF) B) and C)
G) B) and E)

Question 2

What does the Federal Consumer Credit Protection Act state regarding how much a debtor's wages may be garnished?

Accepted Answer

A)   That a debtor must be able to keep the 75 percent of his or her weekly net income.
B)   That a debtor must be able to keep 30 times the federal minimum wage.
C)   That a debtor must be able to keep the greater of the following two options: 75 percent of his or her weekly net income or 30 times the federal minimum wage.
D)   Nothing because the Federal Consumer Credit Protection Act does not address garnishment.
E)   Nothing because there is no Federal Consumer Credit Protection Act.F) A) and B)
G) B) and E)

Question 3

An artisan's lien is a claim on ______ property.

Accepted Answer

A)   Real, personal, and movable
B)   Personal and real, but not movable
C)   Movable but not personal or real
D)   Personal, but not movable or real
E)   Movable and real, but not personalF) A) and C)
G) All of the above

Question 4

Both artisan's and mechanic's liens are super-priority liens.

Accepted Answer

A) True 
 B)False

Question 5

Which of the following is a term for a lien that has priority over other types of liens?

Accepted Answer

A)   An excess lien
B)   A super-priority lien
C)   A top lien
D)   A novation lien
E)   A priority lienF) B) and D)
G) All of the above

Question 6

Which of the following is an order that permits the creditor to recover property beyond foreclosed property?

Accepted Answer

A)   A deficiency judgment
B)   A remainder judgment
C)   A total judgment
D)   A composition judgment
E)   A reverted judgmentF) A) and E)
G) A) and C)

Question 7

At any time before the sale of real property subject to a mortgage,the debtor may recover the property by paying the debt along with additional costs and interest.

Accepted Answer

A) True 
 B)False

Question 8

Assuming no exemption applies,which of the following will most likely be the result of the dispute between Harold and Peggy regarding the television set?

Accepted Answer

A)   Harold will win the dispute because he has rights to a super-priority lien, and he will be able to recover amounts to which he is due from the sale of the television before Peggy is entitled to any funds.
B)   Peggy will win the dispute because a judicial lien is always enforced before any other type of lien, and she will be able to sell the television for amounts owed to her by Molly without sharing any of the funds with Harold.
C)   Harold and Peggy will be required to sell the television and split the proceeds 50-50.
D)   Harold and Peggy will be required to sell the television and split the proceeds based upon their percentage of debt.
E)   Harold and Peggy will be required to sell the television with Harold, the holder of an artisan's lien, receiving only 25%, and Peggy receiving the rest.F) C) and D)
G) A) and C)

Question 9

What does the Federal Consumer Credit Protection Act state regarding the amount that may be garnished from a pay check?

Accepted Answer

The act states that a debtor must be abl...

Question 10

Which of the following is a judicial order authorizing a local law officer to seize and sell any of the debtor's real or personal nonexempt property?

Accepted Answer

A)   A writ of execution
B)   A writ of attachment
C)   A writ of garnishment
D)   A writ of foreclosure
E)   A writ of mortgageF) B) and C)
G) D) and E)

Question 11

Which of the following is false regarding the process of attachment?

Accepted Answer

A)   A creditor typically seeks an attachment as a prejudgment remedy in a legal action.
B)   The creditor must file a lawsuit prior to seeking an attachment.
C)   After attachment is complete, the creditor holds the property until judgment.
D)   The court may attach the debtor's personal or real property.
E)   The court may attach the debtor's checking and savings accounts.F) C) and D)
G) All of the above

Question 12

A[n] ______ lien is a lien that is created solely through statute,regardless of whether the debtor wishes the lien to be created.

Accepted Answer

A)   Consensual
B)   Statutory
C)   Judgment
D)   Approved
E)   EvaluatedF) All of the above
G) B) and E)

Question 13

What type of order allowed Peggy to seize money from Molly's bank account?

Accepted Answer

A)   Attachment
B)   Garnishment
C)   Relinquishment
D)   Foreclosure
E)   ConsolidationF) A) and E)
G) D) and E)

Question 14

Which of the following was the result in Cooper Investments v.Conger,the case in the text in which guarantors of a note claimed that they were not liable because the terms of the note had been altered without their consent?

Accepted Answer

A)   That the guarantors consented by implication and remained liable.
B)   That the guarantors failed to file a financing statement evidencing their position and that they, therefore, retained liability.
C)   That the alterations should discharge the guarantors from liability on the note.
D)   That the alterations should discharge the guarantors, but only for 50% of the obligation on the note.
E)   That the alterations were commercially reasonable and that, therefore, the guarantors remained liable.F) A) and E)
G) B) and D)

Question 15

Discuss the rights of a surety and a guarantor including rights when multiple co-sureties or guarantors owe the debtor's obligation to a creditor.

Accepted Answer

If a surety or guarantor pays the debtor...

Question 16

An assignment for the benefit of creditors is an involuntary proceeding instituted generally by a bankruptcy court.

Accepted Answer

A) True 
 B)False

Question 17

Assuming the court follows the reasoning of Bates County Redi-Mix Inc.v.Windler discussed in the text,which of the following is the most likely result if Good Windows proceeds with attempting to obtain a lien?

Accepted Answer

A)   Good Windows would likely prevail because it was not the fault of Good Windows that the windows were installed improperly.
B)   Good Windows would likely lose because the windows are not working properly for Selina.
C)   Good Windows would likely lose only because Rex is unwilling to cover the cost of proper installation, and Selina should not be charged for windows when she has no remedy against anyone.
D)   Good Windows would likely lose unless Selina can establish that Good Windows notified her by certified mail that she would have to pay for the windows even if they were improperly installed.
E)   Good Windows would likely be granted a lien for only 50% of the cost of the windows.F) B) and C)
G) A) and B)

Question 18

Creating a mechanic's lien on property automatically ensures that the contractor who filed the lien will receive money.

Accepted Answer

A) True 
 B)False

Question 19

A composition agreement is a contract between creditors and a debtor in which the creditors agree to accept a lesser amount to satisfy the debts and discharge the rest of the debt.

Accepted Answer

A) True 
 B)False

Question 20

Which of the following is true if a guarantor's oral promise to pay a debt is not in writing?

Accepted Answer

A)   The guarantor may raise the absence of writing defense.
B)   The guarantor may raise the statute-of-frauds defense.
C)   The guarantor may raise the consolidation defense.
D)   The guarantor may raise the UCC defense if a sale of a good is involved; otherwise, no defenses are available to the debtor.
E)   There are no defenses available because there is no legal requirement that a guarantor's oral promise be in writing.F) A) and E)
G) B) and D)

Exam 31: Other Creditors Remedies and Suretyship

What type of order allowed Peggy to seize money from Molly's bank account?

Correct AnswerverifiedShow Answer

What does the Federal Consumer Credit Protection Act state regarding the amount that may be garnished from a pay check?

Correct AnswerverifiedThe act states that a debtor must be abl...View AnswerShow Answer

If a surety or guarantor pays the debtor's obligation to the creditor,the surety or guarantor has a right to ______,which means that the surety or guarantor is entitled to all the rights that the creditor had against the debtor.

Correct AnswerverifiedShow Answer

An assignment for the benefit of creditors is an involuntary proceeding instituted generally by a bankruptcy court.

Correct AnswerverifiedShow Answer

A[n] ______ lien is a lien that is created solely through statute,regardless of whether the debtor wishes the lien to be created.

Correct AnswerverifiedShow Answer

Which of the following is a term for a lien that has priority over other types of liens?

Correct AnswerverifiedShow Answer

What does the Federal Consumer Credit Protection Act state regarding how much a debtor's wages may be garnished?

Correct AnswerverifiedShow Answer

Assuming no exemption applies,which of the following will most likely be the result of the dispute between Harold and Peggy regarding the television set?

Correct AnswerverifiedShow Answer

A composition agreement is a contract between creditors and a debtor in which the creditors agree to accept a lesser amount to satisfy the debts and discharge the rest of the debt.

Correct AnswerverifiedShow Answer

Both artisan's and mechanic's liens are super-priority liens.

Correct AnswerverifiedShow Answer

Discuss the rights of a surety and a guarantor including rights when multiple co-sureties or guarantors owe the debtor's obligation to a creditor.

Correct AnswerverifiedIf a surety or guarantor pays the debtor...View AnswerShow Answer

Creating a mechanic's lien on property automatically ensures that the contractor who filed the lien will receive money.

Correct AnswerverifiedShow Answer

Which of the following is false regarding the process of attachment?

Correct AnswerverifiedShow Answer

Assuming the court follows the reasoning of Bates County Redi-Mix Inc.v.Windler discussed in the text,which of the following is the most likely result if Good Windows proceeds with attempting to obtain a lien?

Correct AnswerverifiedShow Answer

At any time before the sale of real property subject to a mortgage,the debtor may recover the property by paying the debt along with additional costs and interest.

Correct AnswerverifiedShow Answer

Which of the following is a judicial order authorizing a local law officer to seize and sell any of the debtor's real or personal nonexempt property?

Correct AnswerverifiedShow Answer

An artisan's lien is a claim on ______ property.

Correct AnswerverifiedShow Answer

Which of the following is an order that permits the creditor to recover property beyond foreclosed property?

Correct AnswerverifiedShow Answer

Which of the following is true if a guarantor's oral promise to pay a debt is not in writing?

Correct AnswerverifiedShow Answer

Which of the following was the result in Cooper Investments v.Conger,the case in the text in which guarantors of a note claimed that they were not liable because the terms of the note had been altered without their consent?

Correct AnswerverifiedShow Answer

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If a surety or guarantor pays the debtor...
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