Ch 14 Class Notes Flashcards Preview

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Flashcards in Ch 14 Class Notes Deck (7):
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Creditors rights

Ability to collect money when borrower can't pay

1

Assurity

3rd party arrangement promises to make good on original
Bet in place of borrower

Assuritor primarily liable to creditor if debtor defaults

2

Bankruptcy

When borrower can't make good on obligations, all debts
Are discharged after money runs out (debtor doesn't pay
Anymore)

Mechanism created by US constitution
(Ex. Like estate when someone dies)

3

Ch 7 bankruptcy

Trustee takes and liquidates all assets of debtor to pay
Off creditors in terms of priority

4

Ch 11 bankruptcy, how does it affect credit report

Allows for Company reorganization

Stays on credit report for 10 years, company won't get financing

5

Automatic stay

Injunction where debtor can't be contacted by creditors
And prevents further action against debtor

6

Priority of creditors, how do creditors get priority?

Creditors that get paid first have priority

Creditors get priority take collateral/security interest in property

Creditors that don't have collateral have last priority and
Don't get paid if money runs out