1. A owes B $250,000 on a mortgage on A’s residence. A also has $100,000 in stocks and securities. A has no other debt. A’s house has gone down in value to $200,000. How much will B be able to collect from A?
2. Same facts as 8, except A has credit card debt of $3,000,000 and has no other assets. A declares bankruptcy. How much will B be able to collect? How much will the credit card companies be able to collect? Explain why having secured debt (mortgage) is important to a creditor.