BL-Chapt28 - Creditors Rights and Remedies Chapter...

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Unformatted text preview: Creditors' Rights and Remedies Chapter Introduction 28-1 Laws Assisting Creditors 28-1a Liens 28-1b Garnishment 28-1c Creditors' Composition Agreements 28-1d Mortgages 28-2 Suretyship and Guaranty 28-2a Suretyship 28-2b Guaranty 28-2c Defenses of the Surety and the Guarantor 28-2d Rights of the Surety and the Guarantor 28-3 Protection for Debtors 28-3a Exempted Real Property 28-3b Exempted Personal Property Chapter Recap Page 1 of 16 Print Chapter 2010-8-30 http://atext.aplia.com/controller/ChapterPrint.aspx?isbn=0324655223&mod=0&ch=28... Chapter Introduction Normally, creditors have no problem collecting the debts owed to them. When disputes arise over the amount owed, however, or when the debtor simply cannot or will not pay, what happens? What remedies are available to creditors when a debtor defaults (fails to pay as promised)? In this chapter, we focus on some basic laws that assist the debtor and creditor in resolving their dispute without the debtor's having to resort to bankruptcy–a topic to be discussed in Chapter 30. In Chapter 29, we will discuss the remedies that are available only to secured creditors (those whose loans are supported or backed by collateral) under Article 9 of the Uniform Commercial Code (UCC). Page 2 of 16 Print Chapter 2010-8-30 http://atext.aplia.com/controller/ChapterPrint.aspx?isbn=0324655223&mod=0&ch=28... 28-1 28-1a Laws Assisting Creditors Liens Mechanic's Liens Artisan's Liens Judicial Liens Writ of Attachment Both the common law and statutory laws other than Article 9 of the UCC create various rights and remedies for creditors. We discuss here some of these rights and remedies, including liens, garnishment, creditors' composition agreements, and mortgage foreclosure. A lien is a claim against a debtor's property that must be satisfied before the property (or its proceeds) is available to satisfy the claims of other creditors. As mentioned, liens may arise under the common law or under statutory law. Statutory liens include mechanic's liens, whereas artisan's liens were recognized at common law . Judicial liens are those that represent a creditor's efforts to collect on a debt before or after a judgment is entered by a court. Liens are a very important tool for creditors because they generally take priority over other claims against the same property (priority of claims will be discussed in depth in Chapter 29). When a person contracts for labor, services, or materials to be furnished for the purpose of making improvements on real property but does not immediately pay for the improvements, the creditor can place a mechanic's lien on the property. This creates a special type of debtor- creditor relationship in which the real estate itself becomes security for the debt....
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BL-Chapt28 - Creditors Rights and Remedies Chapter...

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