Exam 28: Introduction to Credit and Secured Transactions

The principal debtor's lack of capacity is a defense for both the principal debtor and the surety if they are sued by the creditor.

What does the term "judgment-proof" imply about a debtor?

Which of the following is the oldest and also the simplest security device?

Under the Pennsylvania system,the general contractor's failure to perform his contract or his abandonment of the work has a direct effect on the lien rights of subcontractors and materialmen.

In the case of foreclosure by action and sale,the creditor has no right to a deficiency and the debtor has no right to any surplus.

Jerry wants to purchase a flat.So he borrows $50,000 from XYZ bank.He signs a note for $50,000 and gives the bank a $50,000 mortgage on the flat as security for his repayment of loan.Within a year and a half,Jerry repays the entire loan.After the repayment of the loan,which of the following right does Jerry have against XYZ bank?

Mike operates an upholstering business.He goes to Hans' house to reupholster a sofa for Hans.After the work was complete,Hans refused to pay the agreed price.Mike wants to assert a lien against the sofa in order to collect the money due to him.Is Mike entitled to a lien under these circumstances?

Sarah,age 17,buys a car on credit from Lora.Sarah signs a promissory note,agreeing to pay $1000 a month on the note until the note is paid in full.Lora has Sarah's father cosign the note.Under these circumstances,Sarah's father is:

A distinction between a surety and a cosurety is that only a cosurety is entitled to the right of/to:

A surety has a right of exoneration.

In the case of _____,a buyer takes possession of the property,pays the taxes,insures the property,and assumes several obligations of an owner.However,the seller keeps legal title and does not turn over the deed until the purchase price is paid.

In a(n)_____ transaction,the borrower keeps the title of his real property with a third party and in the event of default,the third party can sell the property so that the creditor can recover his loan.

A clause in a mortgage specifies that "if the mortgaged property is sold,then the remaining balance becomes immediately due and payable." This clause is called:

Which of the following is generally true about state statutes establishing mechanic's and materialman's liens?

A submaterialman is not entitled to a lien,unless specifically stated by the Statute of the State which is applicable to him.

Who are party to a deed of trust?

The right of a lienholder to possess goods does not automatically give the lienholder the right to sell the goods or to claim ownership if his charges are not paid.

Today,most artisans' liens:

Robert cosigns a note for his friend Amelia,which she has given to Credit Union to secure a loan.Suppose the note was originally for $5,000 and payable in 12 months with interest at 10 percent a year.Credit Union and Amelia later agree that Amelia will have 24 months to repay the note but that the interest will be 13 percent per year.Robert is not aware of this change of terms.In the event of Amelia defaulting on the loan,will Robert have to repay the debt?

Which of the following statements is true regarding a guarantor?