Ch 13 - Creditor/Debtor Relationships & Bankruptcy

Question 1

Lein

Answer 1

“you owe me money, and until you pay, I have a right to your stuff”

Question 2

Merchant Lein

Answer 2

For contractors not paid for work done on real estate

Question 3

Artisan’s Lein

Answer 3

When someone repairs your personal property and hasn’t been paid

Like dry cleaners. They have a right to your clothes until you pay

Question 4

Judicial Lein

Answer 4

A lein given by a court ruling

Question 5

Writ Of Attachment

Answer 5

When a court case is ongoing this writ temporarily seizes the debtor’s assets so that he can’t sell/transfer them before potentially losing them

Question 6

Surety

Answer 6

A person who’s directly liable to pay another person’s debts the moment that person defaults

Question 7

Guarantor

Answer 7

A person who’s liable to pay another person’s debts when that person defaults and the creditor already tried and failed to collect from them

Question 8

Contribution Right

Answer 8

For when there are 2+ sureties. If one surety pays more than the agreed upon share with the other sureties, they’re entitled to get reimbursed

Question 9

Subrogation

Answer 9

When a surety pays a loss on behalf of the other, they’re entitled to recover that loss from the party that caused it

Question 10

Ch. 7 Bankruptcy - Liquidation

Answer 10

Debtor has to sell all remaining assets and pay off debts with it. Whatever is left after that is excused

Question 11

Ch. 11 Bankruptcy - Reorganization

Answer 11

More common with businesses.

Allows the business to stay open while they work out a plan to repay their debts, then they have the remaining debt forgiven

Question 12

Ch. 13 Bankruptcy - Individual Repayment Plan

Answer 12

Allows individuals with regular income to pay part/all of the debt off over time with a repayment plan.

Debtors keep property, can pay debts in installments using future income.

Less complicated/expensive

Question 13

Ch. 13 Bankruptcy Criteria

Answer 13

For individuals with unsecured debts under $394,725 and secured debts under $1,184,200

Question 14

Automatic Stay:

Answer 14

Legal “pause button”

Gives the debtor temporary protection on their debts and time to reorganize and settle debts.
Goes into effect immediately when bankruptcy is filed

Can’t lose the house when this is in effect

Question 15

Preference Payment

Answer 15

ILLEGAL.

When the debtors pays a creditor shortly before filing bankruptcy so that the creditor gets paid more than they otherwise would get under the bankruptcy

Question 16

Involuntary Bankruptcy

Answer 16

When creditors force a debtor into bankruptcy

Question 17

Garnishment

Answer 17

Allows the creditor to collect money directly from the debtor’s income after winning a judgement in court