Exam 19: Creditors Rights and Bankruptcy

Bill and Cody agree to guarantee Wyatt's debt.Bill's maximum liability is $60,000,and Cody's is $40,000.Wyatt owes $40,000 and is in default.Bill pays the creditor the entire amount.In the absence of an agreement to the contrary,Bill can recover from Cody

Bartleby owes $5,000 to Countryside Credit Union.As a prejudgment remedy to collect the debt,Countryside could use

If a debtor's income is below the median income,there is a presumption of bankruptcy abuse.

Verna files a petition in bankruptcy in a liquidation proceeding.If the court administers the means test and concludes that Verna is abusing the bankruptcy process by filing for a liquidation,the court will most likely

The same principles that govern the filing of a liquidation petition apply to reorganization proceedings.

Current City (CC)is a retail seller of television sets.CC sells Dhani a $5,000 large-screen,high-definition,plasma set on a retail installment security agreement in which he pays $100 down and agrees to pay the balance in equal installments.CC retains a security interest in the set,and perfects that interest by filing a financing statement centrally.Two months later,Dhani is in default on the payments to CC and is involuntarily petitioned into bankruptcy by other creditors.Discuss CC's right to repossess the TV set and whether CC has priority over the trustee in bankruptcy to any proceeds from the disposal of the set.

Mac files a petition for a discharge in bankruptcy.Mac's failure to appear at a meeting of the creditors listed in Mac's schedules may result in Mac being

Laurel defaults on a loan owed to Maverick Bank.As a creditor,Maverick may attempt to place liens on all of Laurel's property except

Kenyon files a petition for bankruptcy.Kenyon must include with the petition

Teona files a voluntary petition in bankruptcy for relief through a liquidation.Debts that will not be discharged include claims for

Federal law governs garnishment actions.

A guarantor can be required to pay an obligation only after the principal debtor defaults.

Ronaldo agrees to pay Simplex Cash Store a debt that is otherwise dischargeable in bankruptcy.This is

Fact Pattern 19-2 Mary’s home is in a state that has a $30,000 homestead exemption. Mary de¬faults on a $60,000 debt that she owes to Nina. Mary’s home is sold at auc¬tion for $80,000. -Refer to Fact Pattern 19-2.Nina may recover

A writ of execution is a court order to execute a debtor after the entry of a final judgment in a creditor's lawsuit against the debtor.

Swim & Trim Fitness Corporation wants to formulate a plan under which it pays a portion of its debts and is discharged of the remainder while continuing in business.To accomplish this goal,Swim & Trim should file a petition in bankruptcy for relief through

Subrogation refers to the right of a co-surety to recover from the other co-sureties the amount paid above his or her proportionate share of a debt.

An involuntary bankruptcy occurs when the debtor's credit does not cover all of his or her debts.

Wilbur files a petition in bankruptcy for relief through an individual's repayment plan.Wilbur is granted a discharge.Debts that will not be discharged include claims for

On the entry of an order for relief in a reorganization case,the creditors generally take over the operation of the debtor's business.