An Automatic Stay Would Prevent a Creditor from Creating a Lien

question 51

True/False

An automatic stay would prevent a creditor from creating a lien against the debtor's property.

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Definitions:

Obligation

An obligation is a legal or moral duty to do or not to do something.

Purchase-Money Security

A legal interest or lien on a piece of property which secures the repayment of the funds used to purchase the property.

Collateral

An asset pledged by a borrower to secure a loan, subject to seizure in the event of default.

Secured Party

A secured party refers to an individual or entity that holds an interest in the secured property, typically as collateral, to secure payment or performance of an obligation.