Exam 20: Creditors Rights and Bankruptcy

Child-support debts will be suspended by a voluntary bankruptcy filing.

A material change in a loan contract between a creditor and a debtor dis-charges a surety only to the extent that the surety suffers a loss.

The filing of a petition for bankruptcy will automatically stay most legal actions against the debtor.

Muffins-2-Go buys a truck from Street Vehicles,Inc.,under a contract signed by Riley,Muffins-2-Go's president,making him personally liable if Muffins-2-Go does not pay the loan.Riley is

Friendly Credit Corporation (FCC) believes that Gary may dispose of the assets that FCC expects to receive as payment for Gary's debt before FCC can obtain a judgment.FCC may ask a court to issue a writ of

Dina asks Edie to co-sign a credit application so that she can borrow money and buy a truck from First Street Motors.If,after the loan agreement is signed,Dina agrees to a higher rate of interest without telling Edie,then Edie is

In order of priority,the claims of all unsecured creditors in a class must be satisfied before any re-maining amounts can be distributed to the next class.

Wilson wants to file an ordinary,or straight,bankruptcy.Wilson should file using

Some student loans are dischargeable in a Chapter 7 bankruptcy.

Foreclosure is the legal process by which a lender repossesses and auctions off property that has secured a loan.

In most states,state law determines the amount of a debtor's property that is exempt from dis-tribution on bankruptcy.

A lien is an encumbrance on property to satisfy a debt or protect a claim for the payment of a debt.

Portia owes Bon $500 on their contract,but refuses to pay.To collect,Bon files a me-chanic's lien,under which security for the debt is repre-sented by

Dorothy files a petition for bankruptcy under Chapter 13.If she is granted a discharge,debts that will most likely be discharged include

A creditor's composition agreement may be entirely enforceable.

Jay files a bankruptcy petition under Chapter 7.Among his debts are un-paid taxes,fines owed to the government,student loans owed to Mega University,and support owed to his ex-wife Kris.Most likely to be dis-charged are

To use attachment as a remedy,a creditor must have an enforceable right to payment of the debt.

Certain types of property are exempt from writs of execution or attachment.

Shippers Dispatch Corporation orders office equipment from Office Outfitters,Inc.,which has an unperfected security interest in the equipment until it is paid for.Meanwhile,Shippers Dispatch takes out a loan from Capital Credit,Inc.,subject to a security interest in Shippers Dispatch's building and equip-ment,which Capital perfects.Shippers Dispatch files a bankruptcy petition under Chapter 7.If the petition is granted,in what or-der will Shippers Dispatch's creditors be paid?

In some states,a judgment creditor must obtain a separate order of gar-nishment to cover each of the debtor's pay periods.