Exam 29: Creditors Rights and Remedies

If a homeowner defaults, or fails to make the mortgage payments, the lender has the right to foreclose on the mortgaged property.

Suretyship and guaranty provide debtors with the right to seek payment from a third party if the debtor, or principal, desires to default on his or her obligations.

With a mechanic's lien, real estate becomes security for a debt.

Lyndon owes $10,000 to Metro Bank. As a prejudgment remedy to collect the debt, Metro could use a writ of

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

Vito borrows $110,000 from Watershed Bank to buy a home. If he fails to make payments on the mortgage, the bank has the right to repossess and auction off the property securing the loan. This is

Pippin signs a lease on behalf of Quixotic Games, Inc., with Riverview Office Suites. As part of the lease, Pippin signs a document titled "GUARANTY." If Quixotic Games stops paying the rent, it is most likely that li?ability or loss for the unpaid amount will rest with

George borrows funds from Hometown Credit Union (HCU) to buy real property. George signs a written instrument that gives HCU an interest in the property as security for the debt's payment. This is

Beatrix defaults on a debt to Credit Loan Corporation (CLC). As a creditor, CLC can place liens on all of Beatrix's property except

A writ of attachment is a court order that directs a sheriff to seize and sell the debtor's nonexempt property either at the time a lawsuit is filed or immediately afterward.

Fact Pattern 29-2B (Questions B17-B19 apply) Robin's home is in a state that has a $30,000 homestead exemption. Robin de?faults on a $60,000 debt that she owes to Suburban Mortgage Company. Robin's home is sold at auc?tion for $80,000. -Refer to Fact Pattern 29-2B. Suburban Mortgage may recover

Only a few types of property-a debtor's wages or bank account, for example-can be garnished.

Builders Construction Company performs a contract with Christina to add a sun porch to her house, but she does not pay. In most states, Builders Construction could create a lien and place it on Christina's property by filing

A guaranty contract between the guarantor and the creditor need not be in writing or electronically recorded to be enforceable unless the main purpose exception applies.

Fact Pattern 29-1B (Questions B4-B5 apply) Michael contracts with Jill to fix the brakes on her Honda Civic. Jill leaves her car with Michael, but refuses to pay when the work is done. -Refer to Fact Pattern 29-1B. Michael refuses to return the car to Jill until she pays for the brake work. This is

A writ of execution applies to a debtor's nonexempt real or personal property wherever located.

Erin and Dooley, a married couple, borrow $120,000 from Capital & Credit Bank to buy a home. When Erin and Dooley divorce, they are unable to make payments on the mortgage. The market value of the home has declined to less than the balance of the loan. Capital & Credit agrees to a sale of the property for this amount. This is

When a surety or guarantor pays a debt owed to a creditor, he or she acquires any right that the creditor had against the debtor.

Creditors who have a perfected security interest in a debtor's property normally take priority over mechanic's and artisan's liens.

Portia owes Bon $500 on their roof repair contract, but refuses to pay. To collect, Bon files a me?chanic's lien. Under a mechanic's lien, security for the debt is repre?sented by