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15 Cards in this Set
- Front
- Back
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What are the three req's for a lien to attach to property.
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1. Agreement begtween parties
2. Value given by the secured party 3. Debtor must have rights in the collateral. |
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A security agreement must describe what?
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reasonably identifies the collateral
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What are the five rights and duties of the party with possession of collater.
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1. Reasonable Care
2. Right to reimbursement for expenses. 3. Risk of loss - on the debtor in case of an insurance short-fall. 4. Accounting for profits - the creditor can use any increase in value as additional collateral. Money recieved must be ultimately credited toward the debtor or applied to his account. Right to repledge - creditor can use that interest as cololateral for another debt. |
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Ways to evidence a security interest. (3 ways)
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1. Agreement
2. Possession 3. Control |
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After Acquired Property and Floating liens - what type of language and when does the lien attach?
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The lien attaches as soon as the debgtor acquires an interest in the property.
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What is perfection of a security interest
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WHen the security intrest is good against the world.
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What are the five ways of perfecting a secuirty interest?
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1. Filing
2. Taking possession of collateral 3. Control 4. Automatic perfection 5. Temporary perfection |
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How do you perfect by filing?
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Need to file a financing statement with
1. name and mailing address of debtor 2. Name and mailing address of secured party 3. Indication of the collateral |
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Must a debtor authorized a financing statement?
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Yes
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How long is a filing effective?
Exceptions |
5 years
Exceptions for Utilities, some fixtures and mobile homes (30 years...like a mortgage.) |
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Does a financing statement have to mention after acquired property?
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No - it is just supposed to put people on notice that there MAY be a security interest.
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What is a continuation statement and when may it be filed?
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A continuation statement continues the effectiveness of the lien for five more years. It may be filed during the last six months of effectiveness.
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What is automatic perfection
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UCC gives certain things automatic perfection.
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What type of transactions perfect automatically.
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PMSI's. It attaches and perfects as soon as the purchase is made.
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What are the three elements of a PMSI
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1. Creditor sells the goods to the debtor on credit and reserves a security interest OR
2. advances the funds used to purchase goods and reserves a security interest. |
