[REG] Debtors, Creditors, Guarantors

3.1 Debtor vs Creditor

Debtor breaches the contract(fails to pay money, the creditor may proceed with legal actions)

1) Pre-judgment attachment 딱지붙이는 것, 손대지마

2) Garnishment 원천징수

    garnishment up to 25% of the employee's wage

 

Multiple creditors

1) Composition agreement

- by bankruptcy code or state statutes

- created bet creditors

- consideration is necessary bet creditors, reduction of the debt amount

 

 

2) Assignment for the benefit of creditors

Debtor transfer of asset > Bankruptcy estate(assignee) sell the asset > distribute to creditors(pro-rata basis)

* creditor dissatisfied with this decision, fo to the court 

 

3. Debtor's right

Fair Debt Collections Practice Act (FDCPA)

Regulation for the collection methods

 

3.2 Suretyship and Guaranty

1. Definition

1) Guaranty 일반보증

Obligated to pay debt only after a debtor cannot fulfill the contractual duty

1) K Creditor-Debtor-Guarantor

2) Debtor cannot pay

3) Creditor attempts to collect F Debtor

4) Notice to guarantor

 

2) Suretyship

Obligated to pay debt when a debtor breaches a contract

1) K creditor-debtor-surety

2) Debtor cannot pay

3) Surety 바로 청구가능 notice x, attempts x

 

2. Contract issue

Stature of fraud

- Agreement must be in writing

- Surety, the guarantor must sign

 

Elements for contract modification

Offer-acceptance=mutual assent between parties

Consideration

initial suretyship, guaranty contract, additional suretyship> modification

Statute of fraud(SOF) 1) premarital agree 2) Real property 3) Suretyship guaranty 4) UCC > $500 5) Service < Equal Dignity Rule

 

 

3.3 Creditor's rights under Suretyship, Guaranty

Debtor: payment/ performance at maturity date

Surety: payment/ performance at maturity date

             no need to notify a surety of the debtor's default

Guarantor: Creditor must attempt to collect from the debtor first

             Notifies a guarantor of the debtor's default and requires the guarantor to fulfill the obligation 

Security interest 담보권

            taking judicial process of the collateral(debtor)

            requiring the surety to pay the debt

 

 

3.4 Surety's and Guarantor's Rights

1. Exonerate독촉: before surety, guarantor's payment

2. Surety/ Guarantor's payment on behalf of Debtor

3. Get Reimbursement

    Subrogation: guarantor>Creditor로 변신 강제 bankrupcy 진행

* Contribution: the right of a co-surety after payment, to demand a pro-rata payment from the other co-sureties

* Reimbursement: the right of a surety to recover from the debtor payments made to the creditor

 

3.5 Surety's and Guarantor's Defense

1. Personal defense, Contractual defense

Personal Defense	Contractual defense
Death, incapacity insolvency, bankruptcy Personal set-off(creditor's discretion)	Breach of contract impossibility, impracticability Fraud, undue influence, mutual/unilateral mistake Statute of limitation Failure to give material info Statute of fraud = written contract

 

2. Rule 

Surety, guarantor's defense = debtors's contractual defense

                                               + surety/guarantor's contractual defense + surety, guarantor's personal defense

* surety가 알지도 못한 리스크가 상당히 증가된다면 계약자체를 취소할수있음

* Debtor's personal defense, Contractual defense

Personal Defense	Contractual defense
Minor, incompetence Insolvent Death, Bankruptcy	1) S/G's personal defense 2) S/G's Contractual defense 3) D's personal defence(x) 4) D's contractual defense(o) 5) D에게 속하서 S/G 보증계약 체결 + Creditor가 S/G가 속아서 보증한 사실을 알아야함

 

3. Special issues

Debtor -> Creditor

1)  Debtor Due  빚갚으러 옴

2) Creditor "내일오시오"

3) Result S/G 사라짐

 

 

3.6 Compensated surety vs Non-compensated surety

Compensated surety = commercial surety - Bank, credit company- surety fee - debtor agreement is modified > increases S's risk > releases the surety's duty

Non-compensated surety - Father, mother, friend: no payment for the suretyship - if the debtor agreement is modified > it releases the surety's duty

 

 

3.7 Co-sureties

- Each co-surety has the same rights a surety is supposed to have

- Joint and several liability between co-sureties

- Right of contribution

	Suretyship	Creditor releases A without consent	Creditor releases A with consent	A's death/ bankruptcy*	material alteration without S's consent
Surety A	$10K	0/20	0	0	Automatically release the surety
Surety B	$6K	6/20	6/10	6/10
Surety C	$4K	4/20	4/10	4/10

 * Death/ Bankruptcy 애초에 계약을 채결하지 않은것으로 봄