Question 1

________ liens are either imposed by a court or can be created by a sales contract and are issued in the interest of fairness.

Accepted Answer

A)  Blended 
B)  Consummate 
C)  Possessory 
D)  Equitable 
E)  Judicial 
A)  Blended 
B)  Consummate 
C)  Possessory 
D)  Equitable 
E)  Judicial D

Question 2

Which of the following is a court-ordered judgment permitting a local court officer, such as a sheriff, to seize a debtor's property before the entry of a final judgment in an underlying case?

Accepted Answer

A)  Garnishment 
B)  Attachment 
C)  Contempt 
D)  Fixture 
E)  Law enforcement lien 
A)  Garnishment 
B)  Attachment 
C)  Contempt 
D)  Fixture 
E)  Law enforcement lien B

Question 3

Which of the following is NOT generally part of the procedure a creditor must follow before attaching?

Accepted Answer

A)  Filing a lawsuit against a debtor alleging a debt is owed. 
B)  Posting a bond with the court covering costs associated with the attachment 
C)  Providing a legal basis at a court hearing for the attachment 
D)  Proving that the creditor has a secured interest in the property 
E)  Listing the grounds for the attachment application 
A)  Filing a lawsuit against a debtor alleging a debt is owed. 
B)  Posting a bond with the court covering costs associated with the attachment 
C)  Providing a legal basis at a court hearing for the attachment 
D)  Proving that the creditor has a secured interest in the property 
E)  Listing the grounds for the attachment application D

Question 4

If the proceeds from a judicial sale are greater than the debt owed the contractor after the sale, the surplus is paid to ________?

Accepted Answer

A)  the court 
B)  the contractor 
C)  the IRS 
D)  they are split between the contractor and the debtor 
E)  any excess funds from a sale to pay the lien go to the debtor. 
A)  the court 
B)  the contractor 
C)  the IRS 
D)  they are split between the contractor and the debtor 
E)  any excess funds from a sale to pay the lien go to the debtor.

Question 5

Which of the following is NOT a requirement if a contractor decides to foreclose on a lien?

Accepted Answer

A)  Consent of the homeowner to the original lien. 
B)  Notice of foreclosure to the homeowner. 
C)  Filing of a foreclosure action within a designated period of time after filing the lien. 
D)  Advertisement of the foreclosure sale. 
E)  A timely foreclosure sale within state deadlines. 
A)  Consent of the homeowner to the original lien. 
B)  Notice of foreclosure to the homeowner. 
C)  Filing of a foreclosure action within a designated period of time after filing the lien. 
D)  Advertisement of the foreclosure sale. 
E)  A timely foreclosure sale within state deadlines.

Question 6

Why is it important for a creditor to perfect a secured interest if there is the potential that a lien will subsequently be placed on the same property?

Accepted Answer

A)  Because otherwise the creditor will not be able to make a claim if the lien holder makes a claim. 
B)  Because otherwise the creditor has to split the proceeds of property with the lien holder. 
C)  Because the lien creditor will completely take over the secured interest. 
D)  Because the secured interest will be lost if a lien is placed on the property. 
E)  Because a lien creditor will have priority over an unsecured interest. 
A)  Because otherwise the creditor will not be able to make a claim if the lien holder makes a claim. 
B)  Because otherwise the creditor has to split the proceeds of property with the lien holder. 
C)  Because the lien creditor will completely take over the secured interest. 
D)  Because the secured interest will be lost if a lien is placed on the property. 
E)  Because a lien creditor will have priority over an unsecured interest.

Question 7

What happens if an exemption filed in court by a debtor is limited to a certain amount of money?

Accepted Answer

A)  The debtor will lose his entire exemption if the property is valued over the designated amount. 
B)  An appraiser assesses the value of the property claimed by the debtor as an exemption. 
C)  The debtor has the burden of proving the value of the exempt property. 
D)  The creditor has the burden of proving the value of the exempt property. 
E)  The value of the exempt property is determined based on the original purchase price. 
A)  The debtor will lose his entire exemption if the property is valued over the designated amount. 
B)  An appraiser assesses the value of the property claimed by the debtor as an exemption. 
C)  The debtor has the burden of proving the value of the exempt property. 
D)  The creditor has the burden of proving the value of the exempt property. 
E)  The value of the exempt property is determined based on the original purchase price.

Question 8

A ________ is a contract between a creditor and a third party who agrees to pay another person's debt and is primarily liable for the debt whereas in a ________, a third party, must pay a debt only after the debtor has defaulted.

Accepted Answer

A)  Suretyship; guaranty 
B)  Guaranty; certified agreement 
C)  Certified agreement; suretyship 
D)  Certified agreement; guaranty 
E)  Guaranty; suretyship 
A)  Suretyship; guaranty 
B)  Guaranty; certified agreement 
C)  Certified agreement; suretyship 
D)  Certified agreement; guaranty 
E)  Guaranty; suretyship

Question 9

Which of the following was the result in the case of Alabama Court of Civil Appeals in the text in which the plaintiffs claimed argued that, because the execution was irregular, the writ of execution should be quashed?

Accepted Answer

A)  the circuit court did not enter a judgment, due to the petition to quash the writ of execution by the plaintiff. 
B)  the defendant sold property to satisfy the default judgement and returned the excess proceeds to the plaintiff. 
C)  the defendant in the case properly advertised the sale of property before sale, therefore meeting statutory requirements in Alabama. 
D)  the Court of Appeals determined the circuit court was correct to not grant Sharp the relief requested. 
E)  the Court of Appeals determined the circuit court erred in declining to grant Sharp the relief requested. 
A)  the circuit court did not enter a judgment, due to the petition to quash the writ of execution by the plaintiff. 
B)  the defendant sold property to satisfy the default judgement and returned the excess proceeds to the plaintiff. 
C)  the defendant in the case properly advertised the sale of property before sale, therefore meeting statutory requirements in Alabama. 
D)  the Court of Appeals determined the circuit court was correct to not grant Sharp the relief requested. 
E)  the Court of Appeals determined the circuit court erred in declining to grant Sharp the relief requested.

Question 10

If a mechanic builds a music room on a house, the mechanic can create a lien on the piano kept in the music room.

Accepted Answer

A) True 
 B)False

Question 11

Which of the following are a class of items that are typically not exempt from seizure to satisfy a debt through a judicial lien?

Accepted Answer

A)  Household items 
B)  Tools to carry on a trade 
C)  Cell phones 
D)  Clothing 
E)  Equity in a vehicle 
A)  Household items 
B)  Tools to carry on a trade 
C)  Cell phones 
D)  Clothing 
E)  Equity in a vehicle

Question 12

A surety is primarily liable to the creditor for a debtor's debt.

Accepted Answer

A) True 
 B)False

Question 13

What process does a contractor usually have to go through to create a lien?

Accepted Answer

A)  The lien is created automatically be operation of law. There is no process. 
B)  The contractor must get consent of the homeowner to create a lien. 
C)  The homeowner must voluntarily agree in a written pre-construction contract to allow the contractor to create a lien. 
D)  The contractor must file a written notice of the lien on the property with the county clerk within a designated period of time. 
E)  The contractor must file a lawsuit and ask the court to impose a judicial lien. 
A)  The lien is created automatically be operation of law. There is no process. 
B)  The contractor must get consent of the homeowner to create a lien. 
C)  The homeowner must voluntarily agree in a written pre-construction contract to allow the contractor to create a lien. 
D)  The contractor must file a written notice of the lien on the property with the county clerk within a designated period of time. 
E)  The contractor must file a lawsuit and ask the court to impose a judicial lien.

Question 14

The term "super-priority liens" applies to both artisan's and mechanic's liens.

Accepted Answer

A) True 
 B)False

Question 15

A mechanic's lien must be on personal property, not real property.

Accepted Answer

A) True 
 B)False

Question 16

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)  Evaluated 
A)  Consensual 
B)  Statutory 
C)  Judgment 
D)  Approved 
E)  Evaluated

Question 17

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 18

What is the purpose of a creditor seeking a court order for attachment?

Accepted Answer

A)  To protect secured creditors 
B)  To ensure a debtor doesn't sell or hide property to try to avoid paying debt 
C)  To obtain court permission to immediately allow a creditor to seize a debtor's property 
D)  To garnish a debtor's wages 
E)  Creditors cannot seek a court order for attachment 
A)  To protect secured creditors 
B)  To ensure a debtor doesn't sell or hide property to try to avoid paying debt 
C)  To obtain court permission to immediately allow a creditor to seize a debtor's property 
D)  To garnish a debtor's wages 
E)  Creditors cannot seek a court order for attachment

Question 19

Which of the following was the result in Alcantar v. Sanchez, the case in the text involving whether the bank was responsible for conversion when it seized a joint account owned by a father and his sons to collect the debts on a writ of garnishment?

Accepted Answer

A)  Absent clear and convincing evidence of a different intent, the ownership of the funds at issue in this case corresponded with net contributions according to the laws and the bank wrongfully converted the accounts. 
B)  The court ruled that absent good faith - the bank could not be responsible for conversion since it was acting on a writ of garnishment. 
C)  The court ruled that the accounts were not subject to garnishment because it would be against public policy to find as such. 
D)  The court ruled that the accounts were subject to garnishment because the accounts constituted debts due the defendant no matter who owned them. 
E)  The court ruled that the payments were subject to garnishment based on public policy and that the son would have to bring an interpleader action to allocate the correct amount owed on the debt. 
A)  Absent clear and convincing evidence of a different intent, the ownership of the funds at issue in this case corresponded with net contributions according to the laws and the bank wrongfully converted the accounts. 
B)  The court ruled that absent good faith - the bank could not be responsible for conversion since it was acting on a writ of garnishment. 
C)  The court ruled that the accounts were not subject to garnishment because it would be against public policy to find as such. 
D)  The court ruled that the accounts were subject to garnishment because the accounts constituted debts due the defendant no matter who owned them. 
E)  The court ruled that the payments were subject to garnishment based on public policy and that the son would have to bring an interpleader action to allocate the correct amount owed on the debt.

Question 20

When a person hires a worker to make improvements on real property but is later unable to pay the worker, the worker can create a[n] ________ lien on the person's improved real property.

Accepted Answer

A)  Mechanic's 
B)  Approved 
C)  Constructive 
D)  Improvement 
E)  Acknowledged 
A)  Mechanic's 
B)  Approved 
C)  Constructive 
D)  Improvement 
E)  Acknowledged

Exam 31: Other Creditors Remedies and Suretyship

________ liens are either imposed by a court or can be created by a sales contract and are issued in the interest of fairness.

Which of the following is a court-ordered judgment permitting a local court officer, such as a sheriff, to seize a debtor's property before the entry of a final judgment in an underlying case?

Which of the following is NOT generally part of the procedure a creditor must follow before attaching?

If the proceeds from a judicial sale are greater than the debt owed the contractor after the sale, the surplus is paid to ________?

Which of the following is NOT a requirement if a contractor decides to foreclose on a lien?

Why is it important for a creditor to perfect a secured interest if there is the potential that a lien will subsequently be placed on the same property?

What happens if an exemption filed in court by a debtor is limited to a certain amount of money?

A ________ is a contract between a creditor and a third party who agrees to pay another person's debt and is primarily liable for the debt whereas in a ________, a third party, must pay a debt only after the debtor has defaulted.

Which of the following was the result in the case of Alabama Court of Civil Appeals in the text in which the plaintiffs claimed argued that, because the execution was irregular, the writ of execution should be quashed?

If a mechanic builds a music room on a house, the mechanic can create a lien on the piano kept in the music room.

Which of the following are a class of items that are typically not exempt from seizure to satisfy a debt through a judicial lien?

A surety is primarily liable to the creditor for a debtor's debt.

What process does a contractor usually have to go through to create a lien?

The term "super-priority liens" applies to both artisan's and mechanic's liens.

A mechanic's lien must be on personal property, not real property.

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

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.

What is the purpose of a creditor seeking a court order for attachment?

Which of the following was the result in Alcantar v. Sanchez, the case in the text involving whether the bank was responsible for conversion when it seized a joint account owned by a father and his sons to collect the debts on a writ of garnishment?

When a person hires a worker to make improvements on real property but is later unable to pay the worker, the worker can create a[n] ________ lien on the person's improved real property.

An Introduction to Dynamic Business Law

Business Ethics

The Us Legal System

Alternative Dispute Resolution

Constitutional Principles

International and Comparative Law

Crime and the Business Community

Tort Law

Negligence and Strict Liability

Product Liability

Liability of Accountants and Other Professionals

Intellectual Property

Introduction to Contracts

Agreement

Consideration

Capacity and Legality

Legal Assent

Contracts in Writing

Third-Party Rights to Contracts

Discharge and Remedies

Introduction to Sales and Lease Contracts

Title, Risk of Loss, and Insurable Interest

Performance and Obligations Under Sales and Leases

Remedies for Breach of Sales and Lease Contracts

Warranties

Negotiable Instruments: Negotiability and Transferability

Negotiation, Holder in Due Course, and Defenses

Liability, Defenses, and Discharge

Checks and Electronic Fund Transfers

Secured Transactions

Bankruptcy and Reorganization

Agency Formation and Duties

Liability to Third Parties and Termination

Forms of Business Organization

Partnerships: Nature, Formation, and Operation

Partnerships: Termination and Limited Partnerships

Corporations: Formation and Financing

Corporations: Directors, Officers, and Shareholders

Corporations: Mergers, Consolidations, Terminations

Corporations: Securities and Investor Protection

Employment and Labor Law

Employment Discrimination

Administrative Law

Consumer Law

Environmental Law

Antitrust Law

The Nature of Property, Personal Property, and Bailments

Real Property

Landlord-Tenant Law

Insurance Law

Wills and Trusts

Filters

A is a contract between a creditor and a third party who agrees to pay another person's debt and is primarily liable for the debt whereas in a , a third party, must pay a debt only after the debtor has defaulted.