Exam 31: Other Creditors Remedies and Suretyship

A composition agreement is a contract between creditors and a debtor in which the creditors agree to accept a lesser amount to satisfy the debts and discharge the rest of the debt.

"Bad Hair Day." Molly started a new hair salon and leased space for the salon from Peggy. Unfortunately, Molly's styling caused some problems for customers. One customer's hair turned green from her bleaching process, and she burned another customer with a curling iron. Not surprisingly, Molly had little business and was unable to pay her lease payments as they came due. Peggy filed a lawsuit against Molly and obtained a judgment against Molly for $7,000 in past due rent. Peggy asked for a court-ordered judgment permitting the sheriff to seize and sell Molly's equipment including her hair-dryers, pedicure chair, nail polish, and other items, but the judge refused her request. Peggy did, however, obtain an order allowing her to seize $3,000 held in Molly's bank account with which to partially satisfy the debt. Peggy also discovered that Molly had for her personal use a wide-screen television set worth approximately $1,000 which was being held by Harold, a television repairer for the costs of repair. Peggy asked him to turn over the television because her lien had priority, but Harold refused. -Assuming no exemption applies, which of the following will most likely be the result of the dispute between Harold and Peggy regarding the television set?

Which of the following is a court-ordered judgment permitting a local court officer, such as a sheriff, to seize a debtor's property before the entry of a final judgment in an underlying case?

Which of the following is a claim to property by implication of law rather than statute?

A ______ is a contract between a creditor and a third party who agrees to pay another person's debt and is primarily liable for the debt whereas in a ______, a third party, must pay a debt only after the debtor has defaulted.

Which of the following is true if a guarantor's oral promise to pay a debt is not in writing?

"Defective Windows." Selina hired a contractor, Rex, to put new windows in her home that she purchased herself from Good Windows. Unfortunately, Rex made a mess of the windows. While the windows were initially in good shape, Rex cracked some, scratched others, and did not get the windows properly fitted into their frames. Selina received a bill for the windows from Good Windows, but she refused to pay. Selina was told that Good Windows would file a lien, but she believed that there was no basis upon which a lien would be granted. Rex, who refused responsibility for any problems, also filed a lien after Selina refused to pay him. -Which of the following is the most likely result if Rex proceeds with attempting to obtain and enforce a lien?

"Defective Windows." Selina hired a contractor, Rex, to put new windows in her home that she purchased herself from Good Windows. Unfortunately, Rex made a mess of the windows. While the windows were initially in good shape, Rex cracked some, scratched others, and did not get the windows properly fitted into their frames. Selina received a bill for the windows from Good Windows, but she refused to pay. Selina was told that Good Windows would file a lien, but she believed that there was no basis upon which a lien would be granted. Rex, who refused responsibility for any problems, also filed a lien after Selina refused to pay him. -Which of the following is the type of lien that Rex would likely seek?

What does the Federal Consumer Credit Protection Act state regarding the amount that may be garnished from a pay check?

Which of the following is a claim to property in which the lienholder has the right to be in possession of the property until the debt is paid?

A surety is secondarily liable to the creditor for a debtor's debt.

Discuss why a creditor would want to attach property as well as whether attachment is more often sought by secured or unsecured creditors and why.

Creating a mechanic's lien on property automatically ensures that the contractor who filed the lien will receive money.

What does the Federal Consumer Credit Protection Act state regarding how much a debtor's wages may be garnished?

Which of the following is a transfer or assignment by a debtor of title to property to a trustee or an assignee who sells the property with the proceeds of the sale going to pay creditors on a pro rata basis?

An artisan's lien is a claim on ______ property.

A person who holds a lien is called a[n] ____.

An artisan's lien remains in effect regardless of whether the artisan retains the property.

Which of the following exemptions permits a debtor to retain all or a portion of the family home so that the family will retain some form of shelter?

A mechanic's lien is created by ____.