Debtor-Creditor Relationships

Question 1

Creditors’ claims on real OR personal property to secure payment of debt or performance of obligations

Answer 1

Lien

Question 2

A statutory lien on real property (real estate) to secure payment of debts for services or materials to improve hte real property

Answer 2

Mechanic’s lien or materialman’s lien

Question 3

A lien that occurs wehn one repairs or improv es personal property for another and retains possession of that personal property–terminates when creditor receiveS or is offered payment/gives up possession—has priority over all other liens on the property if possesses property

Answer 3

Artisan’s lien (ex. mechanic that repairs a car)

Question 4

A lien that allows hotel to keep possession of guest’s baggage until hotel charges are paid

Answer 4

Innkeeper’s lien

Question 5

Lien imposed by federal, state, or local governments to secure payment of taxes

Answer 5

Tax lien

Question 6

A court-ordered seizure of property due to lack of payment PRIOR to court judgment for past-due debt

Answer 6

Attachment

Question 7

Alllows ccreditor to take possession of personal property to satisfy debt pursuant to successful legal action

Answer 7

Writ of attachment

Question 8

A remedy in which a court order directs sheriff to seize debtor’s property which can then be sold at a judicial sale to pay off creditor, with any excess going back to debtor

Answer 8

Writ of execution

Question 9

Allows a creditor to seize property, usually money, owed to the debtor by a third party (usually banks or empllyers)

Answer 9

Garnishment–state and federal laws limit amt of wages that can be garnished

Question 10

A lien that occurs wehn a party is awarded damages by a court and the party files a lien against property to secure payment

Answer 10

Judgment lien

Question 11

When a debtor fraudulently tries to prevent a creditor from satisfying a judgment lien

Answer 11

Fradulent conveyance

Question 12

Occurs by two or more creditors’ agreement with debtor to accept less than full amount of debt as full satisfaction; new consideration given by creditors is accepting less than was owed

Answer 12

Composition (creditors’) agreement

Question 13

Provides exemptions against execution on debtor’s assets and provides an exception for debtor’s home so that unsecured creditors and trustees in bankruptcy may not satisfy debts from equity in debtors home (BUT, mortgage liens adn IRS tax liens take priorty over this)

Answer 13

Homestead exemption

Question 14

Act that restricts how creditors may collect debts by limiting what debt collectors can do–does not apply to creditors who attempt to collet their own debt

Answer 14

Fair Debt Collection Practices Act

Question 15

Act that requires that lenders and sellers disclose credit terms on loans to consumer-debtors, with the right to rescind within 3 days

Answer 15

Truth-in Lending Act

Question 16

Act that prohibits discrimination in consumer credit transactions based on marital status, sex, race, color, religion, national origin, age, or receipt of welfaire, or because applicant has exercised legal rights

Answer 16

Equal Credit Opportunity Act (civil and criminal penalties)

Question 17

Act that prohibits consumer reporting agencies from including in consumer reports any inaccurate or obsolete informaiton

Answer 17

AFair Credit Reporting Act

Question 18

Act that allows consumer to complain of billing errors and requires creditor to either explain or correct them

Answer 18

Fair Credit Billing Act

Question 19

Act that requires disclosure of annual percentage rate, membership fee, etc. for credit or charge card solicitations or applications

Answer 19

Fair Credit and Charge Card Disclosure Act

Question 20

A third party proise to pay debt owed by debtor if debtor does not pay in which the 3rd party becomes primarily liable

Answer 20

Suretyship

Question 21

A third party who promises to pay debt owed by debtor if debtor does not pay in which the third party is secondarily liable and creditor only needs to request payment from debtor before proceeding against the 3rd part

Answer 21

Guarantor

Question 22

A contract between 2 parties whereby one party makes a promise to a potential debtor to indemnify and reimburse debtor for payment of debt or for losss that may arise infuture

Answer 22

Indemnity contract–NOT suretyship

Question 23

A third party who agrees to pay a debtor’s debt if hte debtor defaults in which the 3rd party becoems secondarily liable and the creditor must exhaust all legal remedies against the debtor before proceeding

Answer 23

Gaurantor of collection (diff. from guarantor)

Question 24

A surety’s right to require the debtor to pay the obligation if they are able to, before the surety pays, or to have the creditor first resort to collateral

Answer 24

Exoneration

Question 25

The surety’s right to step into creditor’s shoes once paid debtor’s debt

Answer 25

Subrugation

Question 26

A surety that is noncompensated–completely discharged for any change incontract made by creditor/debtor

Answer 26

Accomodation surety

Question 27

A compensated surety–completely released if modification in principal debtor’s contract materially increases risk to surety

Answer 27

Commercial surety

Question 28

Exists when there is more than one surety for hte same obligation of principal debtor to same creditor; do not need to be aware of the others but are jointly and severally liable

Answer 28

cosureties

Question 29

An acknowledgement of an obligation to make good the performance by another of some act or responsibility; involves a compensated surety

Answer 29

Surety Bond

Question 30

A surety bond used to have a surety guarantee completion of terms of contracts

Answer 30

Performance bond (i.e. Constructionbond guarantee’s builder’s obligaiton to complete construction)

Question 31

Forms of insurance that protects an employer against losses sustained due to acts of dishonest employees

Answer 31

Fidelity bonds

Question 32

A surety bond guaranteeing that public officials will faithfully execute their duties

Answer 32

Official bonds