Chapter 31 Property - Other Creditor's Remedies Quiz Summer 1999

1. Which of the following primary sources of law give rise to liens?

a. the common law
b. statutes
c. the constitution
d. both A and B

2. A lien usually _______________ take priority over a perfected security interest, and usually _______________ take priority over all other claims.

a. does; does
b. does; does not
c. does not; does
d. does not; does not

3. Al rebuilds the engine in Moe's car, and Moe does not have the money to pay him. Al places an artisan's lien on the car. Which of the following is true?

a. Al can sell the car immediately to repay the debt.
b. Al must give notice to Moe before reselling the car.
c. If resale is done, any amounts received above the value of the engine job must be repaid to Moe.
d. both B and C

4. Which of the following is a possessory lien?

a. an artisan's lien
b. a mechanic's lien
c. both A and B
d. none of the above

5. Which of the following is imposed when improvements are made to real property and not paid for?

a. a mechanic's lien
b. an artisan's lien
c. an innkeeper's lien
d. none of the above

6. When a guest fails to pay a hotel bill, which of these options are available to an innkeeper?

a. impose a lien on the guest's car
b. retain the guest's baggage
c. have the maids seize the guest's wallet while he is in the shower
d. both A and B

7. A debt is past due, and the creditor takes legal action. If property is seized to satisfy the debt before trial proceedings, an _______________ has taken place. If the court decides in the creditor's favor and issues an order that the property be seized, an_______________ will take place.

a. attachment; attachment
b. attachment; execution
c. execution; attachment
d. execution; execution

8. In order to attach property, what must a creditor do?

a. file an affidavit stating the debtor is in default
b. post a bond
c. both A and B
d. none of the above

9. Which of the following governs the procedures that must be followed in a garnishment action?

a. state law
b. federal law
c. both federal and state
d. neither federal nor state

10. Which of the following are exempt from a writ of execution?

a. a person's home
b. all of a person's personal property
c. assets of a person who has declared bankruptcy
d. both A and C

11. Which of the following does an order for garnishment allow a creditor to collect?

a. assets in a debtor's checking account
b. assets in a person's home
c. assets in a person's business
d. both A and C

12. Which of the following order(s) a sheriff to seize nonexempt property?

a. a writ of execution
b. a writ of attachment
c. both A and B
d. none of the above

13. Assume minimum wage is $6 per hour. Paul's disposable income per week is $200. What amount of his $200 is exempt from garnishment under the Credit Consumer Protection Act?

a. $200
b. $180
c. $150
d. $0

14. Under the reasoning of U.S. v. Smith, which of the following can always be garnished by creditors?

a. a pension fund before it is distributed to a retired person
b. pension funds that have been distributed to a retired person
c. both A and B
d. none of the above

15. Creditors' composition agreements attempt to discharge _______________ debts, and are generally _______________.

a. liquidated; valid
b. liquidated; void
c. unliquidated; valid
d. unliquidated; void

16. Alan owes $100,000 on his mortgage when he defaults on his payments. The bank forecloses on his house and sells it for $90,000. May the bank seek more from Alan?

a. no
b. yes, they may seek $10,000.
c. yes, they may seek over $10,000.
d. yes, they may seek up to $5000.

17. Once a property has been foreclosed, what chance must the defaulting party be given to redeem his interest?

a. none
b. He may redeem the interest by making missed payments.
c. He may redeem the interest by repaying the loan in full.
d. He may redeem the interest by repaying the loan in full and any costs and interest that have accrued.

18. Dad signs a loan agreement between son and creditor. In the contract, Dad promises to repay the loan in full if son does not. Who is the guarantor in this situation?

a. dad
b. creditor
c. son
d. none of the above

19. Dad cosigns an agreement between son and creditor, becoming a surety. When may the bank demand payment from dad?

a. immediately
b. only when son defaults
c. after a reasonable period of time
d. never

20. Which of the following must be in writing?

a. a guaranty
b. a surety agreement
c. both A and B
d. none of the above

21. Is there any time a guaranty contract may be oral?

a. no
b. yes, if the contract is for less than $500
c. yes, if the main purpose of the promise is the guarantor's benefit
d. yes, if the contract does not involve real property

22. Which of the following are commonly exempt personal property?

a. clothing
b. animals
c. a car
d. all of the above

23. A surety _______________ receive reimbursement from a debtor when the surety has to pay for the debt, and a surety _______________ receive contribution when there are multiple sureties and he has paid more than his proportionate share.

a. may; may
b. may; may not
c. may not; may
d. may not; may not

24. Al signs as a surety in Bill's contract with Connie. Which of the following will discharge Al's obligations?

a. Bill's incapacity
b. Bill's bankruptcy
c. the statute of limitations
d. none of the above

25. A homestead exemption protects a house from being taken by which of the following?

a. an unsecured creditor
b. a secured creditor
c. both A and B
d. none of the above