Question 1

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 2

A(n) ________ is a claim to property by implication of law rather than statute.

Accepted Answer

A)  property holder's lien 
B)  common law lien 
C)  consummate lien 
D)  possessory lien 
E)  third-party lien 
A)  property holder's lien 
B)  common law lien 
C)  consummate lien 
D)  possessory lien 
E)  third-party lien

Question 3

Allison's bankruptcy on the debt owed by her father has what effect, if any?

Accepted Answer

A)  Allison's father is liable for the debt as he was when he initially signed the loan agreement. 
B)  Allison's father is released in the same manner that Allison is released. 
C)  Allison's father is released only if the bank failed to take sufficient steps to sue Allison and require payment of the loan before she filed for bankruptcy. 
D)  Allison's father is released only if the bank failed to notify him of the bankruptcy in sufficient time to allow him to make a proper claim against Allison in bankruptcy court. 
E)  Allison's father is released only if Allison failed to give him sufficient notice of her plans to file bankruptcy. 
A)  Allison's father is liable for the debt as he was when he initially signed the loan agreement. 
B)  Allison's father is released in the same manner that Allison is released. 
C)  Allison's father is released only if the bank failed to take sufficient steps to sue Allison and require payment of the loan before she filed for bankruptcy. 
D)  Allison's father is released only if the bank failed to notify him of the bankruptcy in sufficient time to allow him to make a proper claim against Allison in bankruptcy court. 
E)  Allison's father is released only if Allison failed to give him sufficient notice of her plans to file bankruptcy.

Question 4

By which of the following is a mechanic's lien created?

Accepted Answer

A)  Acknowledgement 
B)  Consent 
C)  Foreclosure 
D)  Mortgage 
E)  Statute 
A)  Acknowledgement 
B)  Consent 
C)  Foreclosure 
D)  Mortgage 
E)  Statute

Question 5

A third party in a guaranty contract is primarily liable to the creditor for the debtor's debt.

Accepted Answer

A) True 
 B)False

Question 6

A voluntary action the debtor can make to pay debts is to transfer, or assign title of his or her property to a trustee or assignee who sells the property to pay creditors.

Accepted Answer

A) True 
 B)False

Question 7

How much may a debtor's wages be garnished, according to the Federal Consumer Credit Protection Act?

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. 
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.

Question 8

Regardless of whether the artisan retains the property, an artisan's lien remains in effect.

Accepted Answer

A) True 
 B)False

Question 9

A(n) ________ attaches by operation of state statutes to real property as a result of labor or materials provided for the benefit of such property.

Accepted Answer

A)  mechanic's lien 
B)  artesian lien 
C)  judicial lien 
D)  real property lien 
E)  construction lien 
A)  mechanic's lien 
B)  artesian lien 
C)  judicial lien 
D)  real property lien 
E)  construction lien

Question 10

Which of the following is NOT true of wage garnishment?

Accepted Answer

A)  Restrictions on garnishment under the Federal Consumer Credit Protection Act do not apply if the garnishment is for child support. 
B)  States are not allowed to put dollar restrictions on garnishment; only the federal government can. 
C)  Only one wage garnishment is permissible at a time. 
D)  A debtor who makes below a certain amount of money will be exempt from garnishment. 
E)  A debtor can stop garnishment by filing a notice with the court that will lead to a hearing in which the judge determines if the wages are exempt. 
A)  Restrictions on garnishment under the Federal Consumer Credit Protection Act do not apply if the garnishment is for child support. 
B)  States are not allowed to put dollar restrictions on garnishment; only the federal government can. 
C)  Only one wage garnishment is permissible at a time. 
D)  A debtor who makes below a certain amount of money will be exempt from garnishment. 
E)  A debtor can stop garnishment by filing a notice with the court that will lead to a hearing in which the judge determines if the wages are exempt.

Question 11

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)  Securement 
A)  Subrogation 
B)  Reimbursement 
C)  Contribution 
D)  Recoupment 
E)  Securement

Question 12

When a creditor, through legal action, seizes a debtor's property to satisfy the debt, the creditor has a judicial lien.

Accepted Answer

A) True 
 B)False

Question 13

A secured interest is a[n] ________ lien.

Accepted Answer

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

Question 14

Which of the following is an example of circumstances under which a mechanic's lien might not be enforced?

Accepted Answer

A)  If the homeowner does not consent to the lien. 
B)  If a contractor has been paid but subcontractors have not. 
C)  If a contractor performs deficient work. 
D)  If the lien is on real property instead of personal property. 
E)  There are no circumstances under which a mechanic's lien is not enforced. 
A)  If the homeowner does not consent to the lien. 
B)  If a contractor has been paid but subcontractors have not. 
C)  If a contractor performs deficient work. 
D)  If the lien is on real property instead of personal property. 
E)  There are no circumstances under which a mechanic's lien is not enforced.

Question 15

If a creditor brings legal action against a surety or guarantor, the surety or guarantor has no legal defenses available.

Accepted Answer

A) True 
 B)False

Question 16

Henry is a contractor who is building a house for Leedy. Leedy finds out that ACE concrete, ANDY's Pools and Greenlawn Landscaping have all placed liens on her property. She finds out that Ace has a priority lien over ANDY's and Greenlaw. This type of priority lien over other types of liens is known as:

Accepted Answer

A)  An excess lien 
B)  A super-priority lien 
C)  A top lien 
D)  A novation lien 
E)  A priority lien 
A)  An excess lien 
B)  A super-priority lien 
C)  A top lien 
D)  A novation lien 
E)  A priority lien

Question 17

Joel, a creditor, had to foreclose on Georgian's loan. Joel had to sue Georgian in a local court. Joel received a judicial order that authorized a local law officer to seize and sell any of the Georgian's real or personal nonexempt property. What is the name of this order?

Accepted Answer

A)  A foreclosure order 
B)  An attachment order 
C)  A garnishment writ 
D)  A writ of execution 
E)  A property removal order 
A)  A foreclosure order 
B)  An attachment order 
C)  A garnishment writ 
D)  A writ of execution 
E)  A property removal order

Question 18

[Defective Windows] Cecelia hired a contractor, Paul, to put new windows in her home that she purchased herself from Good Windows. Unfortunately, Paul made a mess of the windows. While the windows were initially in good shape, Paul cracked some, scratched others, and did not get the windows properly fitted into their frames. Cecelia received a bill for the windows from Good Windows, but she refused to pay. Cecelia was told that Good Windows would file a lien, but she believed that there was no basis upon which a lien would be granted. Paul, who refused responsibility for any problems, also filed a lien after Cecelia refused to pay him.
-What is the most likely result if Good Windows proceeds with attempting to obtain a lien, assuming the court follows the reasoning of Bates County Redi-Mix Inc. v. Windler discussed in the text?

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 Cecelia. 
C)  Good Windows would likely lose only because Paul is unwilling to cover the cost of proper installation, and Cecelia should not be charged for windows when she has no remedy against anyone. 
D)  Good Windows would likely lose unless Cecelia 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. 
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 Cecelia. 
C)  Good Windows would likely lose only because Paul is unwilling to cover the cost of proper installation, and Cecelia should not be charged for windows when she has no remedy against anyone. 
D)  Good Windows would likely lose unless Cecelia 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.

Question 19

If Heather is needing to know which laws to consult about wage garnishment, which law should she consult?

Accepted Answer

A)  Wage garnishment is governed only by state law. 
B)  Wage garnishment is governed only by federal law. 
C)  Wage garnishment is governed only by local ordinance. 
D)  Both federal and state laws govern wage garnishment. 
E)  Garnishment is governed by contractual provisions not by state law, federal law, or local ordinance. 
A)  Wage garnishment is governed only by state law. 
B)  Wage garnishment is governed only by federal law. 
C)  Wage garnishment is governed only by local ordinance. 
D)  Both federal and state laws govern wage garnishment. 
E)  Garnishment is governed by contractual provisions not by state law, federal law, or local ordinance.

Question 20

A creditor who Pele borrowed money from went to court and asked for the court to bring Pele's checking account under court control until Pele had repaid the money due. This is an example of ________?

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

Exam 31: Other Creditors Remedies and Suretyship

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

A(n) ________ is a claim to property by implication of law rather than statute.

Allison's bankruptcy on the debt owed by her father has what effect, if any?

By which of the following is a mechanic's lien created?

A third party in a guaranty contract is primarily liable to the creditor for the debtor's debt.

A voluntary action the debtor can make to pay debts is to transfer, or assign title of his or her property to a trustee or assignee who sells the property to pay creditors.

How much may a debtor's wages be garnished, according to the Federal Consumer Credit Protection Act?

Regardless of whether the artisan retains the property, an artisan's lien remains in effect.

A(n) ________ attaches by operation of state statutes to real property as a result of labor or materials provided for the benefit of such property.

Which of the following is NOT true of wage garnishment?

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.

When a creditor, through legal action, seizes a debtor's property to satisfy the debt, the creditor has a judicial lien.

A secured interest is a[n] ________ lien.

Which of the following is an example of circumstances under which a mechanic's lien might not be enforced?

If a creditor brings legal action against a surety or guarantor, the surety or guarantor has no legal defenses available.

Joel, a creditor, had to foreclose on Georgian's loan. Joel had to sue Georgian in a local court. Joel received a judicial order that authorized a local law officer to seize and sell any of the Georgian's real or personal nonexempt property. What is the name of this order?

If Heather is needing to know which laws to consult about wage garnishment, which law should she consult?

A creditor who Pele borrowed money from went to court and asked for the court to bring Pele's checking account under court control until Pele had repaid the money due. This is an example of ________?

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

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