MGMT 209 Test 4 Chapter 13
Workers Lien is also called
Garage/mechanic's lien Special type of Artisan's lien
Security Interest
Gives the secured creditor claims in specific property of debtor
Liens
Gives the the creditor (lienholder) the right to possibly hold the debtors property in certain situations to satisfy the debt giving you some priority over the other creditors of the debtor. Does not require a written security agreement Comes from Common Law and Statutory Law
What are the main concerns for secured creditor to maintain?
Have enough collateral to cover the debt and expenses Priority: Be able to take the collateral before any other secured creditor
Purchase money security interest (PMSI)
Held by the creditor, it gives priority over other secured creditors over the secured property. (Not a UCC-1)
Bankruptcy Chapter 13
Reorganization for wage owners w/ fixed income organize a plan to work out dept restrictions: total amount of debt and required income; 5 year pay out
What appropriate executing officer can seize property?
Sheriff and constable
Three required disclosures for EFTA
1) when consumer first applies for access 2) at time of electronic fund transfer (by receipt) 3) periodic statement (monthly or quarterly) if no electronic funds transfered
UCC-1
Filed in order to get priority in a security interest
Fair Credit Billing Act (FCBA) Penalties
Creditor forgeigs right to collect disputed debt $50 for each disputed item
Requirements under the Fair Credit Billing Act
Debtor must timely send written notice of error Creditor must timely send notice of receiving claim and must investigate the claim Creditor must notify the Debtor of outcome, good or bad; correct or not-either requires notice If not follow procedures Creditor forfeits right to collect debt and has to pay $50 penalty for each disputed item
Artisan lien example
Dry cleaners Shoe repair man
What are the general amounts of the exemptions for a single adult?
$30,000 worth of property
What are the general amounts of the exemptions for a family?
$60,000 worth of property
How long is the writ of execution good for?
10 years, and can be extended for 10 years
How long does it take for a judgement to become final?
30 days
Statue of limitation for CROA
5 years
Mechanic's, Contractors or Materialman's Lien
A Lien that covers repairs, improvements, labor or materials, and specially fabricated material on real estate special requirements if on homestead (family's residence)
Statutory Writ of Attachment
A court order that allows the attachment/seizure of the property if the debtor is indebted to the creditor and the debtor will probably dispose of the property
Execution of judgement
A court order to seize non-exempt property of the debtor
Writ of garnishment
A court order to seize the money of someone else that is usually directed at a financial institution where Debtor has money on deposit. The bank holds money and pays the creditor if proven owed to him. A writ that cannot be used in Texas against employers EXCEPT for past due child support obligations.
Secured creditor
A creditor who owns a security interest and has the right to seize some of the debtor's property, hold that property, and sell that property to pay off debt
Landlord's Lien: Farmers
A lien that applies to crops for the growing season
Landlord's Lien: Building Owners
A lien that gives Landlord right to take certain property of the Tenant if he/she does not pay rent Cannot take exempt property Cannot breach the peace
Workers Lien
A lien where the creditor can repossess the property if the payment method is insufficient after they gave property back to debtor Requires separate written agreement
Guarantor
A person guaranteeing to pay the debts of the debtor. (secondary liable)
Surety
A person who promises to pay the debt of someone else but the creditor does not have to try to collect the debt from the debtor first. (primarily liable)
Security Agreement
A written agreement that gives the secured party, the creditor, the right to seize the collateral.
What are the damages under ECOA?
Actual damages punitive damages up to 10,000 injunction to stop future discrimination attorneys fee court costs
Penalties for the Consumer Leasing Act?
Actual damages and $100-$1000 fee
What does the creditor need to file in order to prove the need of a writ of attachment?
Affidavit
Truth in Lending Act
An act that informs the consumer of its credit by requiring disclosures and future costs.
Lending institution
Another name for creditor
Consumer
Another name for debtor
Co-signer
Another person who, in addition to the debtor, signs a lease and becomes liable to pay the payments and be responsible for the debt. (completely liable)
Rural Homestead
Family can choose 200 acres & improvements If single can only choose 100 acres & improvements Debtor designates, doesn't have to be contiguous
Who enforces/administers the Truth in Lending Act (TILA)
Federal Reserve Board
What are the 5 types of liens?
Artisan Workers Landlords Mechanics, contractors, or materialmen's liens Miscellaneous Texas Liens
What are the three types of lien executions?
Attachment Garnishment Execution of judgment
Artisans Lien
Available to someone who provides services/labor on Debtor's personal property. Possessory: creditor must still have possession of the property to have lien
Bankruptcy Chapter 11
Business reorganization; organize a plan to work out of debt ex: GM, Chrysler
Damages of Electronic Funds Transfer Act (EFTA)
Civil: actual, $100-$1000, sometimes treble damages. Criminal: $5000, 1 year of prison, sometimes both
If a landlord is worried that you would not pay rent, the landlord can require parents or another adult to...
Co-sign, sign a surety-ship, or guarantor agreement
Procedure for Faulty Products Purchased with a Credit Card under the Fair Credit Billing Act
Consumer must make a good faith effort to satisfy the claim with the Seller of the product first Consumer can refuse to pay the debt Consumer must notify the Creditor immediately Creditor is required to intervene between the Seller and the Consumer, credit card holder
Lessee
Consumer, individual to whom the lease is offered
Who enforces the Fair Credit Reporting Act (FCRA)
FTC
Who enforces ECOA
FTC FDIC National Credit Union Administration DOT-airlines
Where is property while a dispute is in progress between the creditor and debtor?
It is held subject to the writ of attachment until lawsuit is finalized
Urban Homestead
Land used for a home or family or a single adult, 10 acres and all improvements, does not have to be contiguous
Landlord's Lien
Lien that involves farmers or building owners on tenants property
Bankruptcy Chapter 7
Liquidation property seized, sold, and proceeds paid to creditor
Which lien needs special statutory requirements to perfect it?
Mechanic's, Contractors or Materialman's Lien If not specifically followed, then lien is lost
Execution of judgments can only be applicable to property that is not...
Mortgaged Subject to lien In trust
What must the lineholder first do to execute any lien?
Must foreclose on the property
Can credit repair organizations do anything to repair you credit reports?
No
When is a writ of attachment available?
Only if the debtor... Is about to leave the state Takes the property out of the state Is hiding the property to defraud creditors Has already disposed of some of the property Is about to sell the property under false pretenses Is not a resident of Texas
Fair Credit Billing Act (FCBA)
Part D to TILA, requires Credit card issuers to give consumers notice of their rights and duties at time account is opened and every 6 mo Allows consumers to object to inaccurate billing withing 60 days of the statement and notify creditor in writing of inaccuracy, and to have a uniform means to correct credit card billing errors Creditor must investigate and give written notification of what they found
Consumer Leasing Act
Part E to the TILA only applies to consumer leases; does not apply to real estate, business lease, or corporation total payments cannot exceed $25,000
Lessor
Party offering the lease
Creditor
Party who extends the credit
Debtor
Party who owes the debt Has ownership rights and can use property to pay off debt
Actual damages, $1000, costs of court, attorneys fees, additional damages if applicable.
Penalties under the Fair Debt Collection Protection Act (FDCPA)
What does the Electronic Funds Transfer Act (EFTA) apply to?
Point of sale transactions Automated teller machines (ATM) Direct deposit or withdrawals Transfers initiated by telephones Debit card transfers
Collateral
Property subject to the security interest Can be used to pay off cost of sale/storage/seizure and original debt
Exempt Property
Property that is exempt from seizure to satisfy the debt of the defendant when there is no valid, legal security interest on the property.
Credit Repair Organizations Act (CROA)
Purpose: ensures truthful disclosure of all information about the services sold to consumers by credit repair organizations that the credit repair organizations are not being unfair or deceptive in advertising their service or providing those services goes after companies that claim to be able to repair credit record, history, or rating
Consumer Credit Protection Act (CCPA)
Purpose: make the use of credit more uniform, require disclosure to consumer about cost of credit extension Umbrella law: contains TILA, FDCPA, FCRA, etc
Types of security interests
Real Estate Purchase Money Securities Interest
What are the two types of exempt property?
Real and personal
Equal Credit Opportunity Act (ECOA)
Regulation B; implemented by Fed Reserve Board purpose: to stop discrimination in the issuance of credit due to race, color, religion, sex, national origin, marital status, age, and type of income creditor has 30 days to make a decision on the credit application and to notify the applicant of the decision in writing.
Electronic Funds Transfer Act (EFTA)
Regulation E; administered by Board of Governors of Fed Reserve Board An act that provides a basic framework establishing the rights, liabilities, and responsibilities of participants in the electronic transfer systems. An act that covers transfer funds initiated by electronic devices to transfer funds to debit or credit an account. regulates financial institutions that provide electronic fund transfer services
Garnishee
The bank that receives the writ of garnishment not allowed to pay the debts out of the debtor's account nor release funds to debtor is allowed to charge administrative fees
What happens to the property if a debtor does not pay the judgement?
The property can be sold, and proceeds can be paid
What is the purpose of a writ of attachment?
To prevent the disposal of property
Correct the bill and notify the consumer in writing
Under the Fair Credit Billing Act, if consumer was correct about billing error, the creditor must:
Notify the consumer in writing & give proof of the accuracy of the bill
Under the Fair Credit Billing Act, if creditor was correct about billing error, the creditor must:
Forfeit rights to collect the disputed debt and pay a penalty of $50 for each disputed item.
Under the Fair Credit Billing Act, if the creditor fails to follow notice requirements, then the creditor must:
What are the two types of homestead exemptions?
Urban and rural
What are examples of some personal property that can be totally exempted?
Wages, alimony, child support Professionally prescribed health aids, religious stuff, some retirement accounts & college savings plans
Reimbursement, actual damages, twice the finance charge, attorneys fees. Against Creditor acting negligently/misleadingly: criminal charges, $5000, 1 year in prison or both.
What are the penalties under the Truth in Lending Act?
Major overhaul of lending practices
What did Obama call for in 2009 regarding consumer credit law?
Exempt Property
What is the major reason why Texas is the debtors Haven
It will virtually rewrite current rules governing U.S. finance and banking industries
What will happen if Obama's call of major overhaul of lending practices is passed?
When can a writ of garnishment be used?
When a writ of attachment has been issued for a debt and when a debtor does not have sufficient non-exempt property to satisfy debt in Texas
If a creditor wins a lawsuit, and the writ of attachment/ writ of garnishment do not satisfy the debt, he can request a...
Writ of execution
A writ of garnishment can only be issued by
a court
Worker lien lost if
property has been sold to a bona fide purchaser (didn't know of lien)
FDCPA Penalties for collection agencies
actual damages $1,000 fine court costs attorneys fees additional damages
FCRA Penalties
actual damages additional damages not exceeding $1,000 attorney fees
Penalties for CROA
actual damages punitive damages attorney fees court cost
Fair Debt Collection Protection Act (FDCPA)
directed at collection agencies; protects debtor (individual, family, or 3rd party) designed to stop perceived abusive, deceptive, and unfair debt collection techniques by the collection agencies gives collection agencies guidelines/limitations on how to properly collect debts
Consumer Leasing Act is what kind of law?
disclosure law requires numerous disclosures (see page 368)
Truth in Lending Act (TILA)
disclosure law -- Regulation Z strictly a Consumer Law (Personal, Family, Household items) covers loans up to $25,000 (real estate higher) with more than 4 installments by creditors who regularly extend credit applies to closed-ended and open-ended credit transactions
TILA Penalties for creditor
enforced by FTC : Includes reimbursement, actual damages, twice the finance charge, attorney's fees criminal charges enforced by DOJ : $5000 fine and/or 1 yr prison
Landlord's Lien must be formatted how?
it must be in writing in the lease, must be underlined and conspicuous
Credit Repair Organizations Act (CROA) exclusions
nonprofit organizations that are exempt from taxation creditors who help debtor restructure debt owed to that creditor (ex: Macy's)
Fair Credit Reporting Act (FCRA)
purpose: to insure the banks and other lending institutions have accurate credit information supplied to them by credit reporting agencies sets procedures to obtain credit report and how to correct incorrect information in the credit report. directed at consumer credit reporting agencies
What do consumer reporting agencies do?
regularly engage in the practice of assembling or evaluation consumer credit to prepare a written report to be used in determining if credit should be extended to consumers
Consumer liability for EFTA depends on...
timely notice, oral or written notice within 2 business days of error discovery: $50 or amount of transfer (whichever is less) before 60 days: up to $500
Bankruptcy
ultimate debtor's right last resort
