When a Debt Is Secured by Property as Collateral and the Debtor

question 76

Multiple Choice

When a debt is secured by property as collateral and the debtor defaults,the creditor may:

• A) take possession of the property and retain it in full satisfaction of the debt or sell it.
• B) take possession of the property and use it until the debtor pays the debt.
• C) not take possession of the property,but must sue the debtor for the balance due.
• D) None of these.

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Definitions:

Cash Reserves

Funds that a company or individual keeps on hand to meet short-term and emergency funding requirements.

Reorganization

A comprehensive restructuring of a company's business, legal, or ownership structure, often aimed at improving profitability or efficiency.

Interest Earned

The income received from investments in securities such as savings accounts, certificates of deposit (CDs), bonds, or loans.