Secured Loans, Liens, Bankruptcy, Employment & Cyber Law

Posted on Feb 15, 2026 in Law & Jurisprudence

Secured Loans and Liens

Secured Loans: Loans backed by an asset.
Common law and statutory law: Address remedies in case of default.
Liens: A claim against specific property to satisfy a debt.
Mechanics liens: A security interest given to someone who provides work or improvements to a specific parcel of property.
Judgment liens: A legal claim placed on a debtor’s property after a court issues a monetary judgment against them. It ensures the creditor gets paid if the debtor sells or refinances their property.
* (Usually between landlord and tenant)
Wage garnishment: Legal process where a creditor collects debt by taking a portion of the debtor’s paycheck before they receive it. (Court orders employers.)

Surety / Suretyship: A third party who promises to be responsible for a debtor’s obligation.
Usually by bond: Issued by an insurer.
Debtor can go there after missed payment: A debtor may seek the surety or pursue remedies after a missed payment.
Guaranty / Guarantor: A third party who agrees to be secondarily liable for another’s debt if they default.

To protect a debtor by giving them a fresh start.
To ensure equitable treatment of creditors who are competing for a debtor’s assets.
Bankruptcy Trustee: Person appointed by the court to manage a debtor’s funds.
Discharge: Termination of a bankruptcy debtor’s obligation to pay debts.
Petition in Bankruptcy: The document filed with the bankruptcy court to initiate bankruptcy proceedings.
Consumer debtor: A debtor who is in debt for non-business purposes.
Chapter 7 bankruptcy: Liquidation.

The bankruptcy code requires that the clerk of the court give all consumer debtors written notice of the general purpose, benefits, and costs of each chapter of bankruptcy under which they may proceed.
Information on the types of services available from credit counseling agencies must be provided.
The petitioner must complete a credit counseling course within 180 days.

Bankruptcy can be initiated by petition voluntarily by the debtor or involuntarily by those owed money.
Chapter 7 requires “Schedules”:
List of secured and unsecured creditors.
Statement of financial affairs of the debtor.
List of all owned property.
List of current income and expenses.
Certificate of credit counseling.
Proof of payments received from employers.
Statement of monthly income, itemized.
Copy of debtor’s federal income tax return.
The Means Test: Basic formula to test insolvency and determine if the debtor can afford to pay unsecured debts.
Order of relief: Court orders immediate relief to debt obligations.

In the commercial area, bankruptcy has become a tool to:
Sell (liquidate) overleveraged assets.
Act as a shield/defense to litigation.
Serve as a device to negotiate with tax authorities.
Act as a precursor to recapitalization.
In chapter 11 reorganization:
Creditors and debtors formulate a plan in which the debtor pays a portion of debts and is discharged of the remainder.
Workouts — out-of-court agreements.
Best interest of creditor: Dismissal or suspension of proceedings by the court if it determines doing so is not in creditors’ best interests.
Debtor in possession: The debtor continues to operate the business.
Creditors may form committees to advocate for their group.
The reorganization plan must be fair, equitable, and do the following:
Designate classes of claims and interests.
Specify the treatment to be afforded to the classes.
Provide adequate means of execution.
Provide payment of tax claims over a five-year period.

Involuntary Bankruptcy Requirements:
Creditors have ≥ 12 debtors petitioning, ≥ 3 of which are owed ≥ $16,750 unsecured.
If the debtor has < 12 creditors, at least one must be owed ≥ $16,750 unsecured.
Reaffirmation Agreement: A voluntary agreement by a debtor to pay a dischargeable debt in bankruptcy.

Spam is not necessarily illegal but there are regulations.
Thirty-seven states have enacted laws that prohibit or regulate spam.
The Federal CAN-SPAM Act (2003) sets what spam is and what is legal or illegal.
The U.S. SAFE WEB Act (2006) makes it easier for the FTC to go after foreign spammers.
The Internet Corporation for Assigned Names and Numbers (ICANN) oversees the distribution of domain names.
Cybersquatting: Holding a domain name for ransom.
It is illegal when:
- The domain name is identical or confusingly similar to the trademark of another.
- The one registering, trafficking in, or using the domain name has a “bad faith intent” to profit from that trademark.
Meta tags: Tags websites can put on their site to increase SEO.
Digital Millennium Copyright Act (DMCA):
Established civil and criminal penalties for bypassing anti-piracy protection.
Prohibits the manufacture, import, sale, and distribution of devices and services for circumvention.
Under the DMCA, an ISP is not liable for a customer’s copyright infringement unless it fails to take down the infringement.

Cyber Torts: Torts that arise from online conduct; one of the most prevalent is online defamation.
The right to privacy is guaranteed implicitly by Supreme Court interpretations of the Bill of Rights and explicitly by some state constitutions.

FLSA: Fair Labor Standards Act.
Wages and Hours under FLSA:
Minimum wage: $7.25/hour for covered nonexempt employees (federal floor).
$684/week for exempt salary employees (salary basis test threshold).
States and cities can set their own rate, which may not be less than the federal minimum.
Overtime provisions and exemptions: Must be paid 1.5x pay for each hour over 40 hours.
Under FLSA, child labor is restricted:
Under 14, minors may only:
- Act (perform).
- Deliver newspapers.
- Work for parents.
- Work in agriculture.
From 14 to 15, minors may work as long as it doesn’t interfere with schooling or well-being in permitted jobs such as:
- Office/clerical work.
- Creative arts.
- Restaurant work.
- Light industry.
- Cleaning.
- Agriculture.
- Maintenance.
- Etc.