Exam 29: Creditors Rights and Remedies

A surety is entitled to receive from the debtor the actual amount of the debt paid to the creditor on behalf of the suretyship arrangement but not other expenses incurred.

Stanley's debt to Town Bank is past due. Town Bank obtains a judgment against Stanley to collect the debt, but he refuses to pay. Town Bank asks the court to order Stanley's employer to pay a portion of his paycheck to the bank. This is a request for

The roof in Rosalyn's house springs a leak. She contracts with Shelter Roofing & Restoration Company to repair the roof and fix the dam?age to the house. Rosalyn pays 10 percent of the price in advance. Shelter Roofing does the work, but Rosalyn refuses to pay the rest of the price. What can Shelter Roofing do, and how is it done?

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. If Suburban Mortgage recovers less than it is owed, it can realize the difference from

Gena borrows $350,000 from Fish Island Bank to buy a home, which secures the mortgage. In the seventh year of the loan, Gena stops making payments. After the bank repossesses the property but before it is sold, Gena may buy it by paying

A surety can be required to pay an obligation only after the principal debtor defaults and usually only after the creditor has made an attempt to collect from the debtor.

Recording a mortgage perfects the lender's security interest in the mortgaged property.

Ronaldo's debt to Sofia is past due. Ronaldo obtains a judgment against Sofia to collect the debt, but Sofia will not pay. Ronaldo requests a writ of execution. The property that is seized under the writ of execution must be

Personal property that is most often exempt from satisfaction of judgment debts does not include equipment that the debtor uses in a business or trade.

The purpose of the homestead exemption is to ensure that the debtor will retain some form of shelter.

Liens generally take priority over other claims against the same property.

Ridgeline Bank provides Shirley with a mortgage to buy a home. The rate of interest is fixed for three years and then adjusts annually. This is

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. If Michael imposes a lien on Jill's car, it will end

Rashi is a student at State University. In need of funds to pay for tuition and books, Rashi asks Tiempo Loans, Inc., for a short-term loan. The lender agrees to make a loan if Rashi will have someone who is financially responsible guarantee the loan payments. Umberto, a well-known businessperson and a friend of Rashi's family, calls Tiempo and agrees to pay the loan if Rashi cannot. Because of Umberto's reputation, the loan is made. Rashi is making the payments, but because of illness he is unable to work for one month. He asks Tiempo to extend the loan for three months. The lender agrees, raising the interest rate for the extended period. Umberto is not notified of the extension (and thus does not consent to it). One month later, Rashi drops out of school. All attempts to collect the remainder of the loan from Rashi fail. Can Tiempo assert a claim against Umberto on the debt?

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. Robin will receive

A surety cannot assert the principal debtor's bankruptcy as a defense to avoid liability on the debtor's obligation.

Forbearance is a postponement of part or all of the payments on a loan for a limited time.

Jordan is a surety for Kelly's loan from Lenders Credit Corporation. When the loan comes due, Kelly tries to pay Lenders Credit, but the creditor rejects the payment. Jordan is

A court awards a judgment to Loan Collection Agency, who is the creditor, against Margret, who is the debtor. After the judgment, the creditor requests a court order to seize Margret's property to ensure that the judgment will be collectible. This is

The lender does not have to strictly comply with the state statute governing foreclosure-substantial compliance is sufficient.