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Debtor-creditor relationships

REG Chapter 7 · Area II · Blueprint II.C

When money is lent, the lender wants to be sure it comes back. This chapter follows Coastal Pottery's lender, its owner's personal guarantee, the bank's security interest in her kilns, and finally a supplier, Ridge Ceramics, that slides into bankruptcy. The Blueprint asks you to explain the rights and duties of debtors, creditors and guarantors, the difference between secured and unsecured creditors, how a security interest is perfected, and how property is distributed in bankruptcy. Bankruptcy dollar amounts are those for cases filed on or after April 1, 2025.

In this chapter

1. Creditors' rights outside bankruptcy
2. Suretyship and guaranty
3. Defenses of a surety
4. Secured transactions: attachment
5. Perfection
6. Priority among creditors and buyers
7. Default and the secured party's remedies
8. Bankruptcy: the chapters and starting a case
9. The trustee, distribution and discharge

This chapter has 9 lessons, 50 practice MCQs with explanations and 20 simulations, plus flashcards and a recall sheet.

What this chapter covers

• Rights and duties of debtors, creditors and guarantors
• secured transactions and perfection
• bankruptcy and distribution of the estate

Chapter 6: Contracts · Chapter 8: Federal laws and regulations of business