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Exam 37: Secured Transactions and Suretyship

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Question 31

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Two or more sureties bound for the same debt of a principal debtor are known as:

A) absolute sureties.
B) cosureties.
C) conditional guarantors of collection.
D) co-creditors.

E) B) and D)
F) B) and C)

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Question 32

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If the surety is a(n) ___________,then the creditor may hold the surety liable as soon as the principal debtor defaults.

A) absolute surety
B) conditional surety
C) subrogee
D) mortgagee

E) A) and B)
F) None of the above

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Question 33

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The right of a surety who has paid the creditor to be repaid by the principal debtor is:

What contractual defenses are available to those parties involved in surety relationships?

Karl loaned Linda $100,000.Madeline agreed to act as surety for $100,000.Nora agreed to act as surety for $75,000 and Orville agreed to act as surety for $25,000.Linda later defaulted on the loan,and Karl is now demanding payment from Nora and Orville.What amount do Nora and Orville have to pay? If Nora and Orville pay,does Madeline have any obligation?

Possession is available as a means of perfecting a security interest in accounts and letter-of-credit rights.

A bankruptcy trustee may invalidate a granting of a security interest from the debtor if it was made on the date of or within 90 days before the filing of the bankruptcy petition and it was for the benefit of a creditor for an antecedent debt and was made before the debtor became insolvent.

Payment of the debt or performance of the obligation discharges both the principal debtor and the surety.

What term is used to describe the creation of a security interest that is enforceable against the debtor?

Hank's tractor is collateral for a loan and Hank moves to the next county.In most states,the security instrument must be re-filed in the proper county or it will render the security interest ineffective.

Explain how the 1998 Revisions to Article 9 facilitate electronic filing of a financing statement.

According to the UCC,a computer purchased by a CPA for use in her office will be classified as inventory.

Which of the following is true?

A surety may set off his claims against the creditor if the creditor is solvent.

Article 9 of the UCC applies to a security interest without consent that arises by operation of law,such as a mechanic's lien.

A debtor need not sign the financing statement.

The creditor's rights against the principal debtor are determined by the contract between them.

Article 9 of the UCC is flexible,simple,and it allows a variety of forms of secured financing.

When Mark bought new office furniture on credit,Bartin's Office Supply Co.filed a financing statement.What would be required on the financing statement?

Article 9 of the UCC governs financing transactions involving security interests in real property.