Question
Big Bank loaned $100,000 to ABC Corporation. Arthur Apple signed an agreement with Big Bank to act as guarantor for the ABC Corporation loan. Patty
Big Bank loaned $100,000 to ABC Corporation. Arthur Apple signed an agreement with Big Bank to act as guarantor for the ABC Corporation loan. Patty Pear signed an agreement with Big Bank to act as surety for the ABC Corporation loan. After a period of one year, ABC Corporation was unable to make the scheduled payment to Big Bank and defaulted on the loan.
Required:
Explain, in detail, how Big Bank should proceed to collect on the loan against:
Arthur Apple
Patty Pear
What rights do Arthur Apple and Patty Pear have if they are required to pay Big Bank?
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SOLUTION When a borrower defaults on a loan the lender in this case Big Bank has several options to collect the outstanding balance In this scenario both Arthur Apple and Patty Pear acted as guarantorssureties for the ABC Corporation loan which means that they are legally obligated to pay off the loan in case the corporation defaults Therefore Big Bank can proceed to collect the loan amount from both Arthur Apple and Patty Pear as follows Collecting from Arthur Apple As a guarantor ...
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Canadian Income Taxation Planning And Decision Making
Authors: Joan Kitunen, William Buckwold
17th Edition 2014-2015 Version
1259094332, 978-1259094330
