Question 1

Both artisan's and mechanic's liens are super-priority liens.

Accepted Answer

A) True 
 B)False

Question 2

Which of the following is a term for a lien that has priority over other types of liens?

Accepted Answer

A)   An excess lien
B)   A super-priority lien
C)   A top lien
D)   A novation lien
E)   A priority lienF) A) and E)
G) B) and E)

Question 3

Which of the following was the result in Cooper Investments v. Conger, the case in the text in which guarantors of a note claimed that they were not liable because the terms of the note had been altered without their consent?

Accepted Answer

A)   That the guarantors consented by implication and remained liable.
B)   That the guarantors failed to file a financing statement evidencing their position and that they, therefore, retained liability.
C)   That the alterations should discharge the guarantors from liability on the note.
D)   That the alterations should discharge the guarantors, but only for 50% of the obligation on the note.
E)   That the alterations were commercially reasonable and that, therefore, the guarantors remained liable.F) A) and B)
G) A) and D)

Question 4

Which of the following is the lien of a judgment that arises when a motion for a new trial has been denied?

Accepted Answer

A)   Attorney's lien
B)   Common law lien
C)   Consummate lien
D)   Possessory lien
E)   Denial lienF) C) and E)
G) C) and D)

Question 5

"Rough Start." Debby, who just graduated from college, wanted to buy a new car. She, however, did not have much of a credit history, and the bank would not give her a loan unless she had a cosigner who agreed to be liable on the loan along with Debby. Debby's father cosigned with Debby on her loan at the bank. Debby also wanted to start a real estate business. She needed funds with which to do so. Her boyfriend, George, agreed in a signed writing with the bank that he would pay Debby's start-up loan for the real estate business if Debby did not do so. Unfortunately, Debby did not make any money in the real estate business. She went bankrupt as did George who had been acting as her receptionist.
-Which of the following is the correct term for the agreement entered into between George and the bank?

Accepted Answer

A)   A suretyship
B)   A guaranty
C)   A certified agreement
D)   An acknowledged agreement
E)   An executory promiseF) B) and E)
G) B) and C)

Question 6

Which of the following was the result in Bend Tarp and Liner Inc., v. Bundy, the case in the text in which the plaintiff filed a lien and instituted foreclosure proceedings in connection with a dispute involving payment for a pond liner following the defendant's refusal to pay based on an alleged tear in the liner?

Accepted Answer

A)   That the plaintiff installed a defective liner and was not entitled to foreclose.
B)   That the plaintiff properly installed the liner and was entitled to foreclose.
C)   That the plaintiff properly installed the liner but was not entitled to foreclose because a section of the wall of the pond collapsed and the liner did not serve the purpose for which it was requested.
D)   That although the plaintiff had installed a defective liner, the plaintiff was entitled to foreclose because the defendant did not object to the lien within 10 days.
E)   That although the plaintiff had installed a defective liner, the plaintiff was entitled to foreclose because the defendant did not object to the lien within 30 days.F) C) and E)
G) A) and B)

Question 7

Which of the following is true if a debtor engaged in fraud in order to convince a surety or guarantor to enter into a contract with a third party?

Accepted Answer

A)   Because the third party is innocent, neither the surety nor the guarantor is released from liability.
B)   The surety is released from liability, but the guarantor is not.
C)   The guarantor is released from liability, but the surety is not.
D)   Both the guarantor and the surety will likely be released from liability.
E)   Both the guarantor and the surety will likely be released from liability on interest due on the contract, but not for the principle amount.F) A) and B)
G) B) and C)

Question 8

A[n] ______ lien is a lien that is created solely through statute, regardless of whether the debtor wishes the lien to be created.

Accepted Answer

A)   Consensual
B)   Statutory
C)   Judgment
D)   Approved
E)   EvaluatedF) A) and E)
G) B) and D)

Question 9

Attachment is the same thing as a writ of execution.

Accepted Answer

A) True 
 B)False

Question 10

At any time before the sale of real property subject to a mortgage, the debtor may recover the property by paying the debt along with additional costs and interest.

Accepted Answer

A) True 
 B)False

Question 11

Which of the following is true regarding recovery under a mechanic's lien?

Accepted Answer

A)   Filing a lien automatically ensures that a contractor will receive some money.
B)   Even if a contractor performs deficient work, a mechanic's lien may be enforced.
C)   Federal law governs enforcement of mechanic's liens.
D)   There is no requirement that a contractor give a debtor notice of a foreclosure.
E)   Any excess funds from a sale to pay the lien go to the debtor.F) A) and E)
G) A) and D)

Question 12

Which of the following may occur when a third party agrees to be liable for a debtor's loan either primarily or secondarily?

Accepted Answer

A)   A suretyship, a guaranty, or a certified agreement
B)   A certified agreement or a suretyship, but not a guarantee
C)   A certified agreement or a guaranty, but not a suretyship
D)   A guarantee but not a certified agreement or a suretyship
E)   Either a suretyship or a guaranty, but not a certified agreementF) A) and B)
G) D) and E)

Question 13

Which of the following is true regarding wage garnishment?

Accepted Answer

A)   Wage garnishment is governed only by state law.
B)   Wage garnishment is governed only by federal law.
C)   Wage garnishment is governed only by local ordinance.
D)   Both federal and state laws govern wage garnishment.
E)   Garnishment is governed by contractual provisions not by state law, federal law, or local ordinance.F) None of the above
G) A) and B)

Question 14

"Rough Start." Debby, who just graduated from college, wanted to buy a new car. She, however, did not have much of a credit history, and the bank would not give her a loan unless she had a cosigner who agreed to be liable on the loan along with Debby. Debby's father cosigned with Debby on her loan at the bank. Debby also wanted to start a real estate business. She needed funds with which to do so. Her boyfriend, George, agreed in a signed writing with the bank that he would pay Debby's start-up loan for the real estate business if Debby did not do so. Unfortunately, Debby did not make any money in the real estate business. She went bankrupt as did George who had been acting as her receptionist.
-What is the effect, if any, of Debby's bankruptcy on any debt owed by George?

Accepted Answer

A)   George is not released and will be liable for the loan amounts.
B)   George is released in the same manner that Debby is released.
C)   George is released only if the bank failed to take sufficient steps to sue Debby and require payment of the loan before she filed for bankruptcy.
D)   George is released only if the bank failed to notify him of the bankruptcy in sufficient time to allow him to make a proper claim against Debby in bankruptcy court.
E)   George is released only if Debby failed to give him sufficient notice of her plans to file bankruptcy.F) A) and B)
G) C) and E)

Question 15

A secured interest is a[n] ______ lien.

Accepted Answer

A)   Consensual
B)   Statutory
C)   Judgment
D)   Approved
E)   EvaluatedF) B) and E)
G) A) and B)

Question 16

"Defective Windows." Selina hired a contractor, Rex, to put new windows in her home that she purchased herself from Good Windows. Unfortunately, Rex made a mess of the windows. While the windows were initially in good shape, Rex cracked some, scratched others, and did not get the windows properly fitted into their frames. Selina received a bill for the windows from Good Windows, but she refused to pay. Selina was told that Good Windows would file a lien, but she believed that there was no basis upon which a lien would be granted. Rex, who refused responsibility for any problems, also filed a lien after Selina refused to pay him.

-Assuming the court follows the reasoning of Bates County Redi-Mix Inc. v. Windler discussed in the text, which of the following is the most likely result if Good Windows proceeds with attempting to obtain a lien?

Accepted Answer

A)   Good Windows would likely prevail because it was not the fault of Good Windows that the windows were installed improperly.
B)   Good Windows would likely lose because the windows are not working properly for Selina.
C)   Good Windows would likely lose only because Rex is unwilling to cover the cost of proper installation, and Selina should not be charged for windows when she has no remedy against anyone.
D)   Good Windows would likely lose unless Selina can establish that Good Windows notified her by certified mail that she would have to pay for the windows even if they were improperly installed.
E)   Good Windows would likely be granted a lien for only 50% of the cost of the windows.F) A) and E)
G) A) and B)

Question 17

"Bad Hair Day." Molly started a new hair salon and leased space for the salon from Peggy. Unfortunately, Molly's styling caused some problems for customers. One customer's hair turned green from her bleaching process, and she burned another customer with a curling iron. Not surprisingly, Molly had little business and was unable to pay her lease payments as they came due. Peggy filed a lawsuit against Molly and obtained a judgment against Molly for $7,000 in past due rent. Peggy asked for a court-ordered judgment permitting the sheriff to seize and sell Molly's equipment including her hair-dryers, pedicure chair, nail polish, and other items, but the judge refused her request. Peggy did, however, obtain an order allowing her to seize $3,000 held in Molly's bank account with which to partially satisfy the debt. Peggy also discovered that Molly had for her personal use a wide-screen television set worth approximately $1,000 which was being held by Harold, a television repairer for the costs of repair. Peggy asked him to turn over the television because her lien had priority, but Harold refused.
-What is the most likely reason that the judge refused to allow the sheriff to seize Molly's equipment?

Accepted Answer

A)   It would have been worth more than that owed to Peggy.
B)   It was not listed as assets in the original complaint filed with the court.
C)   It was exempt as tools and instruments needed to carry on a trade.
D)   Peggy had a duty to exhaust all other avenues of recovery before seizing those items.
E)   She incorrectly asked the sheriff to involve law enforcement and should have seized the goods herself.F) None of the above
G) B) and D)

Question 18

Which of the following is a judicial order authorizing a local law officer to seize and sell any of the debtor's real or personal nonexempt property?

Accepted Answer

A)   A writ of execution
B)   A writ of attachment
C)   A writ of garnishment
D)   A writ of foreclosure
E)   A writ of mortgageF) D) and E)
G) A) and B)

Question 19

If proceeds of the sale of real property do not cover the debt, the mortgagee can seek a deficiency judgment.

Accepted Answer

A) True 
 B)False

Question 20

When a creditor, through legal action, seizes a debtor's property to satisfy a debt, the creditor has a[n] ______ lien.

Accepted Answer

A)   Judicial
B)   Mechanic's
C)   Artisan's
D)   True
E)   ContemptF) B) and D)
G) A) and C)

Exam 31: Other Creditors Remedies and Suretyship

Correct Answer
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Correct Answer
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Which of the following is true regarding wage garnishment?

Correct Answer
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When a creditor, through legal action, seizes a debtor's property to satisfy a debt, the creditor has a[n] ______ lien.

Correct Answer
verified

Correct Answer
verified

Attachment is the same thing as a writ of execution.

Correct Answer
verified

A[n] ______ lien is a lien that is created solely through statute, regardless of whether the debtor wishes the lien to be created.

Correct Answer
verified

If proceeds of the sale of real property do not cover the debt, the mortgagee can seek a deficiency judgment.

Correct Answer
verified

At any time before the sale of real property subject to a mortgage, the debtor may recover the property by paying the debt along with additional costs and interest.

Correct Answer
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A secured interest is a[n] ______ lien.

Correct Answer
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Both artisan's and mechanic's liens are super-priority liens.

Correct Answer
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Correct Answer
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Which of the following is true regarding recovery under a mechanic's lien?

Correct Answer
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Correct Answer
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Which of the following is a judicial order authorizing a local law officer to seize and sell any of the debtor's real or personal nonexempt property?

Correct Answer
verified

Which of the following was the result in Cooper Investments v. Conger, the case in the text in which guarantors of a note claimed that they were not liable because the terms of the note had been altered without their consent?

Correct Answer
verified

Which of the following is true if a debtor engaged in fraud in order to convince a surety or guarantor to enter into a contract with a third party?

Correct Answer
verified

Which of the following may occur when a third party agrees to be liable for a debtor's loan either primarily or secondarily?

Correct Answer
verified

Which of the following is the lien of a judgment that arises when a motion for a new trial has been denied?

Correct Answer
verified

Which of the following is a term for a lien that has priority over other types of liens?

Correct Answer
verified

Exam 31: Other Creditors Remedies and Suretyship

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Which of the following is true regarding wage garnishment?

Correct AnswerverifiedShow Answer

When a creditor, through legal action, seizes a debtor's property to satisfy a debt, the creditor has a[n] ______ lien.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Attachment is the same thing as a writ of execution.

Correct AnswerverifiedShow Answer

A[n] ______ lien is a lien that is created solely through statute, regardless of whether the debtor wishes the lien to be created.

Correct AnswerverifiedShow Answer

If proceeds of the sale of real property do not cover the debt, the mortgagee can seek a deficiency judgment.

Correct AnswerverifiedShow Answer

At any time before the sale of real property subject to a mortgage, the debtor may recover the property by paying the debt along with additional costs and interest.

Correct AnswerverifiedShow Answer

A secured interest is a[n] ______ lien.

Correct AnswerverifiedShow Answer

Both artisan's and mechanic's liens are super-priority liens.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Which of the following is true regarding recovery under a mechanic's lien?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Which of the following is a judicial order authorizing a local law officer to seize and sell any of the debtor's real or personal nonexempt property?

Correct AnswerverifiedShow Answer

Which of the following was the result in Cooper Investments v. Conger, the case in the text in which guarantors of a note claimed that they were not liable because the terms of the note had been altered without their consent?

Correct AnswerverifiedShow Answer

Which of the following is true if a debtor engaged in fraud in order to convince a surety or guarantor to enter into a contract with a third party?

Correct AnswerverifiedShow Answer

Which of the following may occur when a third party agrees to be liable for a debtor's loan either primarily or secondarily?

Correct AnswerverifiedShow Answer

Which of the following is the lien of a judgment that arises when a motion for a new trial has been denied?

Correct AnswerverifiedShow Answer

Which of the following is a term for a lien that has priority over other types of liens?

Correct AnswerverifiedShow Answer

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