LAW 603 Study Guide - Midterm Guide: Equity Swap, Fiduciary, Pawnbroker

• School: Ryerson University
• Department: Law and Business
• Course: LAW 603
• Professor: Andre Serero

Document Summary

There are two ways creditors can manage their risk: security interests allows a creditor to seize some of a debtor"s personal property if the debt is not repaid (usually without going to court). Granting a security interest in the asset". Property that is subject to a security interest is collateral". Can be placed on tangible or intangible personal assets: guarantee a contractual promise by a third party (guarantor) to satisfy the principal debtor"s obligation if the debtor fails to do so. **if the debtor agrees to pay a higher rate of interest on the debt, the guarantor"s potential liability is increased. If this happens after the guarantee is signed and without the guarantor"s consent, the law may release the guarantor from liability. Chattel mortgage a transaction in which a debtor gives a creditor title to some specific personal property to secure the performance of an obligation it owes to the creditor.