What Is Your Potential Liability from the Deficiency Payments Clause

question 109

Multiple Choice

What is your potential liability from the deficiency payments clause if you default?

• A)Nothing,since the loan is in default it invalidates all loan clauses.
• B)You will have to pay any legal or repossession fees incurred by the lender.
• C)You will have to pay the remainder of the loan balance if the proceeds from the repossession are not sufficient to pay off the loan.
• D)Both B and C are correct.

---

Definitions:

Horizontal Analysis

Horizontal analysis is a technique in financial analysis where figures in financial statements over different periods are compared to identify trends and growth patterns.

Vertical Analysis

A method of financial statement analysis in which each entry for each of the three major categories of accounts (assets, liabilities, and equities) in a balance sheet is represented as a proportion of the total account.

Base Amount

A reference value or starting point used for financial calculations, such as determining percentages or comparisons.

General-purpose Financial Statements

These are standardized financial reports prepared by organizations to provide key financial data to stakeholders such as income statements, balance sheets, and cash flow statements.