Debtor-Creditor Relationships Flashcards Preview

Regulation > Debtor-Creditor Relationships > Flashcards

Flashcards in Debtor-Creditor Relationships Deck (16):
1

Assignment for the benefit of Creditors

-possible alternative to bankruptcy

-debtor assigns assets to a third party who uses them to pay creditors

-does not release debtor from the debt, unless paid in full

 

2

Bond

contract involving a compensated surety

3

Composition

-possible alternative to bankruptcy

-debtor will repay a portion of debt owed

-releases debtor from obligations with creditors who are part of the compisition

-based in contract law so new consideration is needed to be enforceable

4

Contribution

When a cosurety pays more than its proporitante share of the debt, it can demand payment from other cosureties

5

Cosurety

Two or more sureties guaranteeing the same debt

6

Guarantor

secondarily liable to creditor

7

Reimbursement

If the surety pays the debt, the surety is entitiled to receive whatever it paid to the creditor from the debtor

8

Subrogation

After the surety has paid the debt, it acquires the rights of a creditor

9

Surety

Party who promises to pay the debts of another party

-primarily liable to the creditor

(a) compensated: modification by debtor and creditor will release surety if modification was material

(b) noncompensated: modification by debtor and creditor will release surety regardless of materiality

*Fraud by inducement by the debtor on the surety will not release surety if creditor has extended credit in good faith

10

Lein

creditors' claims on real or personal property

-Mechanic's / Materialman's lean: statutory lien on real property

-Artisan's lein: when creditor repairs/improves personal property and maintains possession of property until paid

-Inkeeper's lein

-Tax liein

11

Attachment

court-ordered seizure of property

-writ of attachment allows creditor to to take possession of property

12

Writ of execution 

court order directs sheriff to seize debtor's property

13

Homestead exemption

Unsecured creditors and trustees in bankruptcy may not satisfy debts from equity in debtor's home

-mortgage liens and IRS tax liens take priority over homestead exemption

14

Truth-in-Lending Act

requires lenders and sellers to disclose credit terms on loans to consumer-debtors

A. additional requirements for credit card statements: (a) disclosre of minimum payments, late fees, introductory rates (b) toll-free number that provides an estimate of time required to repay the balance making minimum payments

B. disclosures on tax consequences of home equity loans and Internet-based credit card solicitations

C. preserves defencses and claims of consumers against predatory loans sold by bankruptcy trustees 

 

15

Exoneration

surety requires debtor to pay obligation (if debtor is able) before surety has paid

16

Federal Fair Debt Collection Practices Act

prevents debt collectors from using unfair or abusive collection methods