Deck 31: Other Creditors Remedies and Suretyship

Question 1

A statutory lien is a lien created solely through statute, regardless of whether the debtor wishes the lien to be created.

Answer 1

True

Question 2

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 remaining debt.

Answer 2

True

Question 3

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

Answer 3

True

Question 4

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

Question 5

A voluntary action the debtor can make to pay debts is to transfer, or assign title of his or her property to a trustee or assignee who sells the property to pay creditors.

Question 6

When a creditor, through legal action, seizes a debtor's property to satisfy the debt, the creditor has a judicial lien.

Question 7

If a mechanic builds a music room on a house, the mechanic can create a lien on the piano kept in the music room.

Question 8

A secured interest is a[n] ________ lien.

A) Consensual
B) Statutory
C) Judgment
D) Approved
E) Evaluated

Question 9

Which of the following is true regarding types of liens?

A) Types of liens include consensual, statutory, and judgment, but not approved or evaluated.
B) Types of liens include consensual and statutory, but not judgment, approved, or evaluated.
C) Types of liens include consensual and judgment, but not statutory, approved, or evaluated.
D) Types of liens include judgment, statutory, approved, and evaluated but not consensual.
E) Types of liens include consensual, statutory, judgment, approved, and evaluated.

Question 10

An attachment is a court order that allows a court officer to seize a debtor's property before entry of a final judgment in a case.

Question 11

A ________ is a person who holds a lien.

A) debtor
B) consenting agent
C) lienholder
D) creditor
E) bondsman

Question 12

If a creditor brings legal action against a surety or guarantor, the surety or guarantor has no legal defenses available.

Question 13

When must a lienholder's claim on a property be settled?

A) It depends upon the type of lien
B) After property is distributed to other creditors
C) After proceeds are distributed to other creditors
D) Before property or proceeds are distributed to other creditors
E) After both all property and proceeds are distributed to other creditors

Question 14

A third party in a guaranty contract is primarily liable to the creditor for the debtor's debt.

Question 15

At any time before the sale of real property subject to a mortgage, the debtor may recover the property by paying the debt along with additional costs and interest.

Question 16

A mechanic's lien must be on personal property, not real property.

Question 17

The mortgagee can seek a deficiency judgment if proceeds of the sale of real property do not cover the debt.

Question 18

Which of the following is false regarding the process of attachment?

A) A creditor typically seeks an attachment as a prejudgment remedy in a legal action.
B) The creditor must file a lawsuit prior to seeking an attachment.
C) After attachment is complete, the creditor holds the property until judgment.
D) The court may attach the debtor's personal or real property.
E) The court may attach the debtor's checking and savings accounts.

Question 19

The term "super-priority liens" applies to both artisan's and mechanic's liens.

Question 20

Regardless of whether the artisan retains the property, an artisan's lien remains in effect.

Question 21

When a person hires a worker to make improvements on real property but is later unable to pay the worker, the worker can create a[n] ________ lien on the person's improved real property.

A) Mechanic's
B) Approved
C) Constructive
D) Improvement
E) Acknowledged

Question 22

Which of the following was the result in Fostveit v. Poplin the case in the text involving the right of a contractor who had built storage units to place a lien on the property in which "substantial performance" has occurred according to a contract?

A) The court found that a lien was able to be placed on a property because Fostveit had substantially performed his portion of the work assigned to him pursuant to the parties' contract.
B) The court found that a lien not allowed to be placed on the property because Fostveit had multiple violations of building codes.
C) The court found that a lien was allowed on the property, but only after Fostveit remedied the building code violations in compliance with local law.
D) The court found that a lien was not available because the Poplin's had improved the property pursuant to the contract and a lien would be inequitable.
E) The court found that a lien was available but the materials and time associated with the improvements the Poplin's had made would need to be deducted from the lien amount.

Question 23

Which of the following was the result in Flynn Builders, L.C. v. Lande, the case in the text in which the plaintiff filed a mechanics lien in connection with a dispute involving payment for unpaid bills related to the construction of the new home?

A) The Iowa Supreme Court upheld the decision of the lower courts that Flynn had substantially completed the work and was entitled to a judgement against the Landes.
B) That Flynn had not completed any of the work on the home and was not entitled to the judgement.
C) The Iowa Supreme Court upheld the decision of the lower courts that Flynn had not substantially completed the work on the home and was not entitled to a judgement against the Landes.
D) The Iowa Supreme Court reversed the decision of the lower courts that Flynn had substantially completed the work on the home and was not entitled to a judgement against the Landes.
E) The Iowa Supreme Court reversed the decision of the lower courts that Flynn had not substantially completed the work on the home and was entitled to a judgement against the Landes.

Question 24

Which of the following was the result in the case of Alabama Court of Civil Appeals in the text in which the plaintiffs claimed argued that, because the execution was irregular, the writ of execution should be quashed?

A) the circuit court did not enter a judgment, due to the petition to quash the writ of execution by the plaintiff.
B) the defendant sold property to satisfy the default judgement and returned the excess proceeds to the plaintiff.
C) the defendant in the case properly advertised the sale of property before sale, therefore meeting statutory requirements in Alabama.
D) the Court of Appeals determined the circuit court was correct to not grant Sharp the relief requested.
E) the Court of Appeals determined the circuit court erred in declining to grant Sharp the relief requested.

Question 25

Kyla hires a contractor to remodel her home. She does not agree to a lien or sign any documentation giving the contractor a lien. He claims a lien on the house anyway. What type of lien does he have?

A) Statutory
B) Consensual
C) Judgment
D) Approved
E) Evaluated

Question 26

Which of the following is an example of circumstances under which a mechanic's lien might not be enforced?

A) If the homeowner does not consent to the lien.
B) If a contractor has been paid but subcontractors have not.
C) If a contractor performs deficient work.
D) If the lien is on real property instead of personal property.
E) There are no circumstances under which a mechanic's lien is not enforced.

Question 27

Why is it important for a creditor to perfect a secured interest if there is the potential that a lien will subsequently be placed on the same property?

A) Because otherwise the creditor will not be able to make a claim if the lien holder makes a claim.
B) Because otherwise the creditor has to split the proceeds of property with the lien holder.
C) Because the lien creditor will completely take over the secured interest.
D) Because the secured interest will be lost if a lien is placed on the property.
E) Because a lien creditor will have priority over an unsecured interest.

Question 28

Which of the following is NOT a requirement if a contractor decides to foreclose on a lien?

A) Consent of the homeowner to the original lien.
B) Notice of foreclosure to the homeowner.
C) Filing of a foreclosure action within a designated period of time after filing the lien.
D) Advertisement of the foreclosure sale.
E) A timely foreclosure sale within state deadlines.

Question 29

Henry is a contractor who is building a house for Leedy. Leedy finds out that ACE concrete, ANDY's Pools and Greenlawn Landscaping have all placed liens on her property. She finds out that Ace has a priority lien over ANDY's and Greenlaw. This type of priority lien over other types of liens is known as:

A) An excess lien
B) A super-priority lien
C) A top lien
D) A novation lien
E) A priority lien

Question 30

What process does a contractor usually have to go through to create a lien?

A) The lien is created automatically be operation of law. There is no process.
B) The contractor must get consent of the homeowner to create a lien.
C) The homeowner must voluntarily agree in a written pre-construction contract to allow the contractor to create a lien.
D) The contractor must file a written notice of the lien on the property with the county clerk within a designated period of time.
E) The contractor must file a lawsuit and ask the court to impose a judicial lien.

Question 31

A(n) ________ is lien that is placed on personal property.

A) mechanic's lien
B) artisan's lien
C) priority lien
D) actuary lien
E) personal property lien

Question 32

By which of the following is a mechanic's lien created?

A) Acknowledgement
B) Consent
C) Foreclosure
D) Mortgage
E) Statute

Question 33

A creditor has a secured interest in your artwork and an artist has a lien on your artwork. Who has priority in obtaining the artwork or the proceeds from the sale of the artwork?

A) The creditor with a perfected secured interest will have priority over the artist.
B) The creditor with an unperfected secured interest will have priority over the artist.
C) The artist will always have priority over the creditor.
D) The creditor will always have priority over the artist.
E) The property must be sold and the artist and creditor must split the proceeds 50-50.

Question 34

If you take your expensive watch to a jeweler for repairs and after costly repairs are made you discover you cannot pay, what options are available to the jeweler?

A) To return the watch to you and seek an artisan's lien
B) To return the watch to you and seek a mechanic's lien
C) To keep and eventually sell the watch unless debts are repaid
D) To return the watch and sue as a secured creditor
E) To keep the watch until debt is paid, but never to sell the watch.

Question 35

If Heather is needing to know which laws to consult about wage garnishment, which law should she consult?

A) Wage garnishment is governed only by state law.
B) Wage garnishment is governed only by federal law.
C) Wage garnishment is governed only by local ordinance.
D) Both federal and state laws govern wage garnishment.
E) Garnishment is governed by contractual provisions not by state law, federal law, or local ordinance.

Question 36

If an artisan's lien is claimed on property, what type(s) of property can it be placed on?

A) Real property only
B) Personal property only
C) Moveable property only
D) Personal and real property
E) Moveable and real property

Question 37

Best Bank lends $3,000 to Juan to purchase a car and Juan signs a loan agreement granting Best Bank a lien on the car. This is an example of what type of lien?

A) Statutory
B) Consensual
C) Judgment
D) Approved
E) Evaluated

Question 38

A(n) ________ attaches by operation of state statutes to real property as a result of labor or materials provided for the benefit of such property.

A) mechanic's lien
B) artesian lien
C) judicial lien
D) real property lien
E) construction lien

Question 39

A[n] ________ lien is a lien that is created solely through statute, regardless of whether the debtor wishes the lien to be created.

A) Consensual
B) Statutory
C) Judgment
D) Approved
E) Evaluated

Question 40

If the proceeds from a judicial sale are greater than the debt owed the contractor after the sale, the surplus is paid to ________?

A) the court
B) the contractor
C) the IRS
D) they are split between the contractor and the debtor
E) any excess funds from a sale to pay the lien go to the debtor.

Question 41

A debtor is permitted to retain all or a portion of the family home so that the family will retain some form of shelter through which of the following exemptions?

A) Real estate
B) Real
C) Personal estate
D) Homestead
E) Shelter

Question 42

A creditor has what type of lien when, through legal action, the creditor seizes a debtor's property to satisfy a debt?

A) Judicial
B) Mechanic's
C) Artisan's
D) True
E) Contempt

Question 43

Which of the following is NOT true when a judge orders a writ of execution?

A) A local law officer can seize and sell a debtor's non-exempt real or personal property.
B) Some states allow a debtor to designate which property will be seized under the writ of execution.
C) If a debtor refuses to designate property for seizure and sale, the law officer can take any non-exempt property.
D) Any and all of a debtor's property can be seized to satisfy an obligation.
E) The writ of execution allows seizure of a debtor's property only after the entry of judgment in the underlying case.

Question 44

Which of the following is NOT true of wage garnishment?

A) Restrictions on garnishment under the Federal Consumer Credit Protection Act do not apply if the garnishment is for child support.
B) States are not allowed to put dollar restrictions on garnishment; only the federal government can.
C) Only one wage garnishment is permissible at a time.
D) A debtor who makes below a certain amount of money will be exempt from garnishment.
E) A debtor can stop garnishment by filing a notice with the court that will lead to a hearing in which the judge determines if the wages are exempt.

Question 45

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?

A) Garnishment
B) Attachment
C) Contempt
D) Fixture
E) Law enforcement lien

Question 46

A creditor who Pele borrowed money from went to court and asked for the court to bring Pele's checking account under court control until Pele had repaid the money due. This is an example of ________?

A) Garnishment
B) Attachment
C) Contempt
D) Fixture
E) Law enforcement lien

Question 47

Some property is exempt from being seized by a creditor to satisfy the debt. The amount of this homestead exemption is:

A) it varies from state to state
B) $50,000
C) $25,000
D) $100,000
E) the value of the actual residence

Question 48

What is the purpose of a creditor seeking a court order for attachment?

A) To protect secured creditors
B) To ensure a debtor doesn't sell or hide property to try to avoid paying debt
C) To obtain court permission to immediately allow a creditor to seize a debtor's property
D) To garnish a debtor's wages
E) Creditors cannot seek a court order for attachment

Question 49

What happens if a debtor is successful in a legal action initiated by a creditor after a creditor attached property?

A) The creditor will be permitted to sell the debtor's property to satisfy the debt.
B) The debtor can recover actual damages only, even if the property was wrongfully attached.
C) The debtor can recover punitive damages only.
D) The debtor's property is returned, but no damages may be obtained by either party.
E) The debtor can recover damages from the creditor for losses suffered while deprived of property and, if the property was wrongfully attached, may recover punitive damages.

Question 50

Joel, a creditor, had to foreclose on Georgian's loan. Joel had to sue Georgian in a local court. Joel received a judicial order that authorized a local law officer to seize and sell any of the Georgian's real or personal nonexempt property. What is the name of this order?

A) A foreclosure order
B) An attachment order
C) A garnishment writ
D) A writ of execution
E) A property removal order

Question 51

Which of the following are a class of items that are typically not exempt from seizure to satisfy a debt through a judicial lien?

A) Household items
B) Tools to carry on a trade
C) Cell phones
D) Clothing
E) Equity in a vehicle

Question 52

Matilda did not pay Tomas for services Tomas provided. Tomas went to court and sued to have Matilda's wages garnished. What type of lien was Tomas seeking?

A) Judicial
B) Mechanic's
C) Artisan's
D) True
E) Contempt

Question 53

What happens if an exemption filed in court by a debtor is limited to a certain amount of money?

A) The debtor will lose his entire exemption if the property is valued over the designated amount.
B) An appraiser assesses the value of the property claimed by the debtor as an exemption.
C) The debtor has the burden of proving the value of the exempt property.
D) The creditor has the burden of proving the value of the exempt property.
E) The value of the exempt property is determined based on the original purchase price.

Question 54

How much may a debtor's wages be garnished, according to the Federal Consumer Credit Protection Act?

A) That a debtor must be able to keep the 75 percent of his or her weekly net income.
B) That a debtor must be able to keep 30 times the federal minimum wage.
C) That a debtor must be able to keep the greater of the following two options: 75 percent of his or her weekly net income or 30 times the federal minimum wage.
D) Nothing because the Federal Consumer Credit Protection Act does not address garnishment.
E) Nothing because there is no Federal Consumer Credit Protection Act.

Question 55

When can a creditor seek a writ of execution?

A) After entry of judgment in the underlying case.
B) Before entry of judgment in the underlying case.
C) After attachment but before judgment.
D) Only if property has been attached for six months.
E) Only if the creditor is a secured creditor.

Question 56

Which of the following is NOT generally part of the procedure a creditor must follow before attaching?

A) Filing a lawsuit against a debtor alleging a debt is owed.
B) Posting a bond with the court covering costs associated with the attachment
C) Providing a legal basis at a court hearing for the attachment
D) Proving that the creditor has a secured interest in the property
E) Listing the grounds for the attachment application

Question 57

A(n) ________ permits a debtor to retain all or a portion of the family home so that the family will have some form of shelter if other property is seized to satisfy a debt.

A) caregiver exemption
B) homestead exemption
C) property right exemption
D) occupancy exemption
E) shelter exemption

Question 58

After judgment is entered against Kylie in a suit for nonpayment by a creditor, the judge orders a local sheriff to seize and sell some of Kylie's valuable jewelry. This is an example of a(n) ________.

A) Writ of execution
B) Order of attachment
C) Decree of seizure
D) Decree of sale
E) Writ of discharge

Question 59

Which of the following was the result in Alcantar v. Sanchez, the case in the text involving whether the bank was responsible for conversion when it seized a joint account owned by a father and his sons to collect the debts on a writ of garnishment?

A) Absent clear and convincing evidence of a different intent, the ownership of the funds at issue in this case corresponded with net contributions according to the laws and the bank wrongfully converted the accounts.
B) The court ruled that absent good faith - the bank could not be responsible for conversion since it was acting on a writ of garnishment.
C) The court ruled that the accounts were not subject to garnishment because it would be against public policy to find as such.
D) The court ruled that the accounts were subject to garnishment because the accounts constituted debts due the defendant no matter who owned them.
E) The court ruled that the payments were subject to garnishment based on public policy and that the son would have to bring an interpleader action to allocate the correct amount owed on the debt.

Question 60

Which of the following statements accurately describes judicial liens?

A) Attachments, writ of execution, and garnishment are types of judicial liens.
B) Writ of execution and attachments are types of judicial liens, but garnishments are not.
C) Garnishments and writ of execution are types of judicial liens, but attachments are not.
D) Writ of execution is a type of judicial lien, but garnishments and attachments are not.
E) Attachments are a type of judicial lien, but garnishments and writ of execution are not.

Question 61

A(n) ________ is an order that permits the creditor to recover property beyond foreclosed property.

A) property judgment
B) option order
C) deficiency judgment
D) mortgagee lien
E) foreclosure lien

Question 62

If Paul proceeds with attempting to obtain and enforce a lien, what is the most likely result?

A) Paul will lose because he performed deficient work.
B) Paul will lose unless he already paid Good Windows for the windows, in which case he would win.
C) Paul will win unless Cecelia has a writing signed by him in which he agrees that he will not seek a lien in the case of deficient work.
D) Paul will win if he proves that he had never had a problem installing windows before.
E) Paul will receive only half of his bill because he performed deficient work.

Question 63

A(n) ________ lien 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) attorney's
B) common law
C) consumer
D) Possessory
E) agent's

Question 64

[Bad Hair Day] Tara started a new hair salon and leased space for the salon from Marisa. Unfortunately, Tara's styling caused some problems for customers. One customer's hair turned green from Tara's bleaching process, and Tara burned another customer with a curling iron. Not surprisingly, Tara had little business and was unable to pay her lease payments as they came due. Marisa filed a lawsuit against Tara and obtained a judgment against Tara for $7,000 in past due rent. Marisa asked for a court-ordered judgment permitting the sheriff to seize and sell Tara's equipment, including her hair-dryers, pedicure chair, nail polish, and other items. The judge refused her request. Marisa did, however, obtain an order allowing her to seize $3,000 held in Tara's bank account to partially satisfy the debt. Marisa also discovered that Tara had, for her personal use, a wide-screen television set worth approximately $1,000 which was being held by Franklin, a television repairer, for the costs of repair. Marisa asked him to turn over the television because her lien had priority, but Franklin refused.
Marisa was allowed to seize money from Tara's bank account with what type of order?

A) Attachment
B) Garnishment
C) Relinquishment
D) Foreclosure
E) Consolidation

Question 65

If a surety or guarantor pays the debtor's obligation to the creditor, the surety or guarantor has a right to ________, which means that the surety or guarantor is entitled to all the rights that the creditor had against the debtor.

A) Subrogation
B) Reimbursement
C) Contribution
D) Recoupment
E) Securement

Question 66

[Defective Windows] Cecelia hired a contractor, Paul, to put new windows in her home that she purchased herself from Good Windows. Unfortunately, Paul made a mess of the windows. While the windows were initially in good shape, Paul cracked some, scratched others, and did not get the windows properly fitted into their frames. Cecelia received a bill for the windows from Good Windows, but she refused to pay. Cecelia was told that Good Windows would file a lien, but she believed that there was no basis upon which a lien would be granted. Paul, who refused responsibility for any problems, also filed a lien after Cecelia refused to pay him.
Which of the following is true regarding the type of lien, if any, that Good Windows is entitled to obtain prior to going to court, assuming the court follows the reasoning of Bates County Redi-Mix Inc. v. Windler?

A) Good Windows is entitled to a mechanic's lien.
B) Good Windows is entitled to an artisan's lien.
C) Good Windows is entitled to a removal lien.
D) Good Windows is entitled to a judicial lien.
E) Good Windows is not entitled to any lien.

Question 67

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?

A) An assignment for the benefit of creditors
B) A composition agreement
C) A sale and transfer agreement
D) A pro rata agreement
E) A termination agreement

Question 68

Which of the following is true if a debtor engaged in fraud in order to convince a surety or guarantor to enter into a contract with a third party?

A) Because the third party is innocent, neither the surety nor the guarantor is released from liability.
B) The surety is released from liability, but the guarantor is not.
C) The guarantor is released from liability, but the surety is not.
D) Both the guarantor and the surety will likely be released from liability.
E) Both the guarantor and the surety will likely be released from liability on interest due on the contract, but not for the principle amount.

Question 69

[Defective Windows] Cecelia hired a contractor, Paul, to put new windows in her home that she purchased herself from Good Windows. Unfortunately, Paul made a mess of the windows. While the windows were initially in good shape, Paul cracked some, scratched others, and did not get the windows properly fitted into their frames. Cecelia received a bill for the windows from Good Windows, but she refused to pay. Cecelia was told that Good Windows would file a lien, but she believed that there was no basis upon which a lien would be granted. Paul, who refused responsibility for any problems, also filed a lien after Cecelia refused to pay him.
What is the most likely result if Good Windows proceeds with attempting to obtain a lien, assuming the court follows the reasoning of Bates County Redi-Mix Inc. v. Windler discussed in the text?

A) Good Windows would likely prevail because it was not the fault of Good Windows that the windows were installed improperly.
B) Good Windows would likely lose because the windows are not working properly for Cecelia.
C) Good Windows would likely lose only because Paul is unwilling to cover the cost of proper installation, and Cecelia should not be charged for windows when she has no remedy against anyone.
D) Good Windows would likely lose unless Cecelia can establish that Good Windows notified her by certified mail that she would have to pay for the windows even if they were improperly installed.
E) Good Windows would likely be granted a lien for only 50% of the cost of the windows.

Question 70

[Bad Hair Day] Tara started a new hair salon and leased space for the salon from Marisa. Unfortunately, Tara's styling caused some problems for customers. One customer's hair turned green from Tara's bleaching process, and Tara burned another customer with a curling iron. Not surprisingly, Tara had little business and was unable to pay her lease payments as they came due. Marisa filed a lawsuit against Tara and obtained a judgment against Tara for $7,000 in past due rent. Marisa asked for a court-ordered judgment permitting the sheriff to seize and sell Tara's equipment, including her hair-dryers, pedicure chair, nail polish, and other items. The judge refused her request. Marisa did, however, obtain an order allowing her to seize $3,000 held in Tara's bank account to partially satisfy the debt. Marisa also discovered that Tara had, for her personal use, a wide-screen television set worth approximately $1,000 which was being held by Franklin, a television repairer, for the costs of repair. Marisa asked him to turn over the television because her lien had priority, but Franklin refused.
What is the term for what Marisa requested when she requested that the judge have law enforcement officers seize and sell Tara's equipment?

A) Order of compliance
B) Order of law
C) Writ of execution
D) Writ of garnishment
E) Writ of debt satisfaction

Question 71

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

A) Artisan's
B) Mechanic's
C) Removal
D) Construction
E) Judicial

Question 72

Which of the following may occur when a third party agrees to be liable for a debtor's loan either primarily or secondarily?

A) A suretyship, a guaranty, or a certified agreement
B) A certified agreement or a suretyship, but not a guarantee
C) A certified agreement or a guaranty, but not a suretyship
D) A guarantee but not a certified agreement or a suretyship
E) Either a suretyship or a guaranty, but not a certified agreement

Question 73

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

A) Franklin will win the dispute because he has rights to a super-priority lien, and he will be able to recover amounts to which he is due from the sale of the television before Marisa is entitled to any funds.
B) Marisa will win the dispute because a judicial lien is always enforced before any other type of lien, and she will be able to sell the television for amounts owed to her by Tara without sharing any of the funds with Franklin.
C) Franklin and Marisa will be required to sell the television and split the proceeds 50-50.
D) Franklin and Marisa will be required to sell the television and split the proceeds based upon their percentage of debt.
E) Franklin and Marisa will be required to sell the television with Franklin, the holder of an artisan's lien, receiving only 25%, and Marisa receiving the rest.

Question 74

________ liens are either imposed by a court or can be created by a sales contract and are issued in the interest of fairness.

A) Blended
B) Consummate
C) Possessory
D) Equitable
E) Judicial

Question 75

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

A) Statute of Frauds defense
B) Common Fraud defense
C) Parol evidence defense
D) Unwritten promise defense
E) Negligence

Question 76

Ridland has had severe problems staying out of debt. He has several creditors who wish to file a garnishment against his wages. Can all of the creditor's file the garnishment at once?

A) Yes, all of the creditors can take a portion of the wages to satisfy Ridland's debt.
B) Yes, the court will collect the garnished wages and divide the money up amongst the creditors.
C) No, only one garnishment will be permitted at a time, and the first creditor to file will usually receive the garnished wages.
D) No, only one garnishment will be permitted at a time, and the creditor with the largest claim will usually receive the garnished wages.
E) No, only one garnishment will be permitted at a time, and the creditor with the smallest claim will usually receive the garnished wages.

Question 77

[Bad Hair Day] Tara started a new hair salon and leased space for the salon from Marisa. Unfortunately, Tara's styling caused some problems for customers. One customer's hair turned green from Tara's bleaching process, and Tara burned another customer with a curling iron. Not surprisingly, Tara had little business and was unable to pay her lease payments as they came due. Marisa filed a lawsuit against Tara and obtained a judgment against Tara for $7,000 in past due rent. Marisa asked for a court-ordered judgment permitting the sheriff to seize and sell Tara's equipment, including her hair-dryers, pedicure chair, nail polish, and other items. The judge refused her request. Marisa did, however, obtain an order allowing her to seize $3,000 held in Tara's bank account to partially satisfy the debt. Marisa also discovered that Tara had, for her personal use, a wide-screen television set worth approximately $1,000 which was being held by Franklin, a television repairer, for the costs of repair. Marisa asked him to turn over the television because her lien had priority, but Franklin refused.
Which of the following is the most likely reason for the judge's refusal to allow the sheriff to seize Tara's equipment?

A) It would have been worth more than that owed to Marisa.
B) It was not listed as assets in the original complaint filed with the court.
C) It was exempt as tools and instruments needed to carry on a trade.
D) Marisa had a duty to exhaust all other avenues of recovery before seizing those items.
E) She incorrectly asked the sheriff to involve law enforcement and should have seized the goods herself.

Question 78

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.

A) Suretyship; guaranty
B) Guaranty; certified agreement
C) Certified agreement; suretyship
D) Certified agreement; guaranty
E) Guaranty; suretyship

Question 79

A(n) ________ is a claim to property by implication of law rather than statute.

A) property holder's lien
B) common law lien
C) consummate lien
D) possessory lien
E) third-party lien

Question 80

A consummate lien is the lien of the judgment creditor that arises when

A) an attorney fails to appear to defend the debtor.
B) a consumer is the third party creditor.
C) the creditor has lost possession of the property.
D) a motion for a new trial has been denied.
E) the judge grants a motion for a new trail.