Question 1

Payment of the principal obligation will not discharge the surety from the obligation.

Accepted Answer

A) True 
 B)False  False

Question 2

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

Accepted Answer

A) True 
 B)False  True

Question 3

A surety is primarily liable for the debt of a principal.

Accepted Answer

A) True 
 B)False  True

Question 4

Fact Pattern 28-1A
Dollar Value Motors asks Estimable Bank for a loan to increase its vehicle inventory.Estimable requires Flair,Dollar Value's president,sign a personal guaranty to pay the debt if Dollar Value defaults.Meanwhile,to buy a pick-up truck from Dollar Value,Gina asks Harper to co-sign a credit application.
-Refer to Fact Pattern 28-1A.If Harper signs the application but fails to con?di?tion her signature on Dollar Value's agreement to pursue its legal remedies against Gina before looking to her,then Harper is

Accepted Answer

A) a surety. 
B) a lienor. 
C) a guarantor. 
D) a creditor. 
A) a surety. 
B) a lienor. 
C) a guarantor. 
D) a creditor.

Question 5

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

Accepted Answer

A) True 
 B)False

Question 6

An artisan's lien is possessory.

Accepted Answer

A) True 
 B)False

Question 7

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

Accepted Answer

A) True 
 B)False

Question 8

If a creditor surrenders collateral to the debtor without the consent of the guarantor,this can reduce the obligation of the guarantor.

Accepted Answer

A) True 
 B)False

Question 9

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

Accepted Answer

A) all of Ronda's real property. 
B) as much of Ronda's real property as Ronda opts to exempt. 
C) none of Ronda's real property. 
D) Ronda's family home in its entirety or up to a specified amount. 
A) all of Ronda's real property. 
B) as much of Ronda's real property as Ronda opts to exempt. 
C) none of Ronda's real property. 
D) Ronda's family home in its entirety or up to a specified amount.

Question 10

Diego performs a contract with Elwood to add a swimming pool to Elwood's property,but Elwood does not pay.Diego can file a lien on Elwood's property if,from the last date labor or materials were provided,he acts

Accepted Answer

A) immediately. 
B) within 60 to 120 days. 
C) within two years. 
D) within a reasonable time. 
A) immediately. 
B) within 60 to 120 days. 
C) within two years. 
D) within a reasonable time.

Question 11

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

Accepted Answer

A) contribution. 
B) redemption. 
C) reimbursement. 
D) subrogation. 
A) contribution. 
B) redemption. 
C) reimbursement. 
D) subrogation.

Question 12

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

Accepted Answer

A) motor vehicles used to commute to work. 
B) stock in various corporations. 
C) items that Laurel selects. 
D) vacant commercial property. 
A) motor vehicles used to commute to work. 
B) stock in various corporations. 
C) items that Laurel selects. 
D) vacant commercial property.

Question 13

Delia refuses to pay Ewing $500 in cash on their contract to repair certain theater sets,which Ewing still possesses.Ewing's lien on the sets will terminate

Accepted Answer

A) if Ewing continues to maintain possession. 
B) if Ewing does not file a written notice of lien within thirty days. 
C) if Ewing voluntarily surrenders possession. 
D) within thirty days. 
A) if Ewing continues to maintain possession. 
B) if Ewing does not file a written notice of lien within thirty days. 
C) if Ewing voluntarily surrenders possession. 
D) within thirty days.

Question 14

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?

Accepted Answer

Uno is not liable,because Smartt committ

Question 15

Francie's debt to Gage is past due.Gage brings a legal action against Francie to collect the debt.To ensure that a judgment in Gage's favor will be collectible,Gage asks the court to order the seizure of Francie's property.This is a request for

Accepted Answer

A) a guaranty (or suretyship)contract. 
B) an order that would violate most state laws. 
C) a writ of attachment. 
D) an order of receivership. 
A) a guaranty (or suretyship)contract. 
B) an order that would violate most state laws. 
C) a writ of attachment. 
D) an order of receivership.

Question 16

If the debtor offers to pay the debt owed to a creditor but the creditor re?fuses the tender,the surety remains obligated on the debt.

Accepted Answer

A) True 
 B)False

Question 17

Fact Pattern 28-1A
Dollar Value Motors asks Estimable Bank for a loan to increase its vehicle inventory.Estimable requires Flair,Dollar Value's president,sign a personal guaranty to pay the debt if Dollar Value defaults.Meanwhile,to buy a pick-up truck from Dollar Value,Gina asks Harper to co-sign a credit application.
-Refer to Fact Pattern 28-1A.If Harper signs the application only after lan?guage is included that requires Dollar Value to exhaust its legal remedies against Gina before looking to her,then Harper is

Accepted Answer

A) a surety. 
B) a lienor. 
C) a guarantor. 
D) a creditor. 
A) a surety. 
B) a lienor. 
C) a guarantor. 
D) a creditor.

Question 18

A homestead exemption allows a debtor to subtract the value of the family home from the amount of a debt.

Accepted Answer

A) True 
 B)False

Question 19

Fact Pattern 28-1A
Dollar Value Motors asks Estimable Bank for a loan to increase its vehicle inventory.Estimable requires Flair,Dollar Value's president,sign a personal guaranty to pay the debt if Dollar Value defaults.Meanwhile,to buy a pick-up truck from Dollar Value,Gina asks Harper to co-sign a credit application.
-Refer to Fact Pattern 28-1A.If,after the loan agreement is signed,Gina agrees to a higher rate of interest without telling Harper,then Harper is

Accepted Answer

A) discharged from the agreement. 
B) liable at the higher rate of interest. 
C) liable at the lower rate of interest. 
D) liable for the principal only. 
A) discharged from the agreement. 
B) liable at the higher rate of interest. 
C) liable at the lower rate of interest. 
D) liable for the principal only.

Question 20

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

Accepted Answer

A) a surety. 
B) a lienor. 
C) a guarantor. 
D) a creditor. 
A) a surety. 
B) a lienor. 
C) a guarantor. 
D) a creditor.

Exam 28: B: Creditors Rights and Remedies

Payment of the principal obligation will not discharge the surety from the obligation.

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

A surety is primarily liable for the debt of a principal.

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

An artisan's lien is possessory.

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

If a creditor surrenders collateral to the debtor without the consent of the guarantor,this can reduce the obligation of the guarantor.

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

Diego performs a contract with Elwood to add a swimming pool to Elwood's property,but Elwood does not pay.Diego can file a lien on Elwood's property if,from the last date labor or materials were provided,he acts

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

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

Delia refuses to pay Ewing $500 in cash on their contract to repair certain theater sets,which Ewing still possesses.Ewing's lien on the sets will terminate

Francie's debt to Gage is past due.Gage brings a legal action against Francie to collect the debt.To ensure that a judgment in Gage's favor will be collectible,Gage asks the court to order the seizure of Francie's property.This is a request for

If the debtor offers to pay the debt owed to a creditor but the creditor re?fuses the tender,the surety remains obligated on the debt.

A homestead exemption allows a debtor to subtract the value of the family home from the amount of a debt.

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: Introduction to Law and Legal Reasoning

B: Introduction to Law and Legal Reasoning

C: Introduction to Law and Legal Reasoning

D: Introduction to Law and Legal Reasoning

A: Courts and Alternative Dispute Resolution

B: Courts and Alternative Dispute Resolution

A: Court Procedures

B: Court Procedures

A: Constitutional Authority to Regulate Business

B: Constitutional Authority to Regulate Business

A: Ethics and Business Decision Making

B: Ethics and Business Decision Making

A: Intentional Torts and Privacy

B: Intentional Torts and Privacy

A: Negligence and Strict Liability

B: Negligence and Strict Liability

C: Negligence and Strict Liability

D: Negligence and Strict Liability

A: Intellectual Property and Internet Law

B: Intellectual Property and Internet Law

A: Criminal Law and Cyber Crimes

B: Criminal Law and Cyber Crime

A: Nature and Terminology

B: Nature and Terminology

C: Nature and Terminology

D: Nature and Terminology

A: Agreement in Traditional and E-Contracts

B: Agreement in Traditional and E-Contracts

A: Consideration

B: Consideration

A: Capacity and Legality

B: Capacity and Legality

A: Mistakes,fraud,and Voluntary Consent

B: Mistakes,fraud,and Voluntary Consent

A: The Statute of Frauds

B: The Statute of Frauds

A: Third Party Rights

B: Third Party Rights

A: Performance and Discharge

B: Performance and Discharge

A: Breach of Contract and Remedies

B: Breach of Contract and Remedies

A: The Formation of Sales and Lease Contracts

B: The Formation of Sales and Lease Contracts

C: The Formation of Sales and Lease Contracts

D: The Formation of Sales and Lease Contracts

A: Title,risk,and Insurable Interest

B: Title,risk,and Insurable Interest

A: Performance Breach of Sales Lease Contracts

B: Performance Breach of Sales Lease Contracts

A: Warranties and Product Liability

B: Warranties and Product Liability

A: International Law in a Global Economy

B: International Law in a Global Economy

A: The Function Creation of Negotiable Instruments

B: The Function Creation of Negotiable Instruments

C: The Function Creation of Negotiable Instruments

D: The Function Creation of Negotiable Instruments

A: Transferability and Holder in Due Course

B: Transferability and Holder in Due Course

A: Liability,defenses,and Discharge

B: Liability,defenses,and Discharge

A: Checks,the Banking System,and E-Money