Exam 28: Creditors Rights and Remedies

Smartt Software Company borrows $10,000 from Term 'N All Loans,Inc.,but cannot repay the loan when it comes due.Term 'N All refuses to ex?tend the time for repayment unless Smartt can provide an acceptable surety.Uno Venture Corporation agrees to act as a surety for the loan af?ter Smartt offers the firm a discount on software and shows Uno financial statements,compiled with Term 'N All's assistance,that misrepresent Smartt's financial situation.Later,after Uno uses the discount to buy software,Smartt again defaults on repayment of the loan,and Term 'N All files a suit against Uno to collect the amount of the debt.Is Uno liable? Why or why not?

A guaranty contract must be in writing to be enforceable.

Doral,Eduard,and Francesca are co-sureties of Glenda's debt to Hi-Credit Company.Doral pays Glenda's entire debt.Doral's right to seek proportionate pay?ments from Eduard and Francesca is the right of

If a creditor obtains a judgment against a debtor and the debtor cannot or will not pay the judgment,the dispute is at an end.

Speedy Delivery Company buys a white van from Tom's Terrific Vehicles,on credit under a guaranty signed by Ulysses,Speedy's president,making him personally liable if Speedy does not pay.Ulysses is

A debtor's vehicle is never exempt from satisfaction of a judgment debt.

Wanda owes Xtra Credit Company $5,000 but refuses to pay.Xtra Credit ob?tains a garnishment order and serves it on Wanda's employer,Young Nursery & Garden,Inc.If Young complies with the order and Wanda stays on the job,is one order enough to garnish all of Wanda's wages for each pay period until the debt is paid?

In a suretyship relationship,a third person's credit becomes the security for a debt.

Rita is a surety for Serena's loan from Title Lenders,Inc.Rita's right to "step into the shoes" of Title Lenders,after paying Serena's debt,and ex?er?cise any of the Title Lenders's rights against Serena is the right of

Pruit performs a contract with Quint to reshingle the roof on Quint's house,but Quint does not pay.Pruit notifies Quint that the property will be sold to satisfy the debt.This is

Ronda's debt to Skye is past due.Skye brings a legal action against Ronda to collect the debt.To ensure that a judgment in Skye's favor will be collectible,Skye asks the court to order the seizure of Ronda's property.Exempt from such an order in most states would be

All of a debtor's pay can be gar?nished.

Creditors may contract with a debtor for discharge of the debtor's liquidated debts.

The distinctions between a surety and a guarantor have been abolished in all states.

Flip's debt to George is past due.George brings a legal action against Flip to collect the debt.George asks the court to order Home Bank,in which Flip has an account,to pay a portion of the funds to George.This is a request for

Federal law governs garnishment actions.

Ping's debt to Oak Furniture Warehouse is past due.Oak obtains a judgment against Ping,but Ping refuses to pay it.Oak asks the court for an order that directs the sheriff to seize and sell any of Ping's nonexempt real or personal property that is within the court's geographic jurisdiction.This is a request for

In a few states,statutes allow the homestead exemption only if the judgment debtor has a family.

If a debtor does not pay a mechanic's lien,the debtor's property can be sold to sat?isfy the debt.

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