Quiz 23: Creditors Rights and Bankruptcy

Business

Company F can let others know of its interest about the collateral kept by it by filing a financial statement with proper federal or local authority about the equipment. It can make paper work about the machinery of Company J kept in its hold. This will create a first priority of its hold over the assets and inform the other creditors about the secured interest it holds over firm J. If Company J defaults on the loan then it can file a report and take claim over the secured machinery. It can also go to court for taking possession of the machinery then disposing it off with proper legal auctioning for getting back the amount due and other legal costs attached with it.

Prejudgement attachment refers to the seizure of property by the court prior to judgement for a debt which is past-due. A writ of execution refers to the order of court which is issued after judgement has been passed against the debtor for seizing his non-exempt property. The proceeds from the sale are used for paying off the judgment and other costs, and remainder is paid to the debtor. The creditor can make use of these remedies for securing the amount to be earned from the debtor and also in cases where the collateral is not enough for paying of the debtor's debt.

No , it does not support for creating a claim of an artisan's lien as Company EA did not have possession of the goods. As per the lien the company must have material possession of the goods used for development of the debtor's asset for making the claim. Hence this claim is invalid.

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