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36 Cards in this Set
- Front
- Back
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Secured Transactions
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T-I-C
Transaction Intended to Create a security interest in personal property or Fixture. |
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Debtor
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The person who owes payment or performance of the obligation
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Security Party
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A lender, seller or other person in whose favor there is a security interest.
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Security agreement
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The agreement between the debtor and the secured party that created the security interest.
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Security interest
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An interest in personal property or fixtures which secures payment or performance of an obligation. It is contingent property interest in the debtor's collateral that the debtor grants the creditor. When the contingency, which is default, occurs, the property interest springs to life and the creditor has rights in the debtor's collateral.
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Collateral
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Property subject to a security interest. Collateral is property that the secured party can repossess upon default to insure that the debt is paid.
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Purchase Money Security Interest
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a. Security party sells debtor collateral on credit and retains a security interest in the item sold.
b. An enabling loan (the credit or loan proceeds must actually be used to acquire the collateral. |
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After acquired property clause
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a secured party often will want to obtain a security interet not only in debtor's present property, but also in property that the debtor will obtain in the future.
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Future advance clause
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A secured party often contemplates making future loans to the debtor and wants to secure these future advances in the present security interest.
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Attachment
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Deals with those steps legally required to give the secured party a security interest in the collateral that is effective as against the debtor. Once a secuirty interest attaches, it is effective against the debor and the creditor has all of the rights of a secured creditor under article 9. A creditor is not a secured creditor until attachment.
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Perfection
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Deals wit those steps legally required to give the secured party an interet in the colateral that is effective as agains the world. In general perfrection is the process of giving public notice of hte security interest to the world.
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Financing Statement
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Document generally used to provide public notice of the the security interest, and so to perfect the security interest.
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Goods
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inlcude all things which are movable at the time the security interest attaches, and include the unborn young of animals and growing crops.
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Classes of Goods
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C-E-F-I.
1. Consumer Goods-used or bought for primary use of personal, family or household purposes. 2. Equipment-Used or bought for use primarily in business. 3. Farm Goods- 4. Inventory-Held by a person who hold them for sale or lease or to be furnished under service contracts; materials used or consumed in a business (in short period of time) |
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Semi-Intangible and intangible property
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CIA DID CG
1. Chattel Paper 2. Instruments (Commercial Paper) 3. Accounts Receivable 4. Documents 5. Investment Property 6. Deposit Accounts 7. Commercial tort claims 8. General intangibles (catch all) |
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Scope of Article 9
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A cass
1. Any transaction, regardless of its form, that creates a security interest in personal property or fixtures by contract. 2. agricultural lien 3. sale (collateral) 4. certain consignments 5. A secured sale disguised as a lease. (meaningful economic value at the end of the lease) |
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Security Agreement
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FVR
A. Form (WAD) Written (or electronically stored) Authenticated (signature or mark Description (reasonably identify the collateral) B. Value C. Rights in the collateral |
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Property Secured may include after-acquired property
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GR: Without an explicit after-acquired property clause in the security agreement, the securied party's security interest only reaches collateral that the debtor had rights in at the time the debtor signed the security agreement.
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Property Secured may include after-acquired property: exceptions to the general rule
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1. Collateral is of a type that is rapidly depleted and replenished.
2. 10 days after secured party gives value. 3. After acquired clause is ineffective as to commercial tort claims |
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Proceeds
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Whatever is received upon the sale, exchange, collection, or other disposition of collateral or proceeds.
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Methods of Perfection
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A Perry Playitipus Notes Ferb
1. Automatic (PMSI in consumer goods) 2. Possession of collateral by secured party 3. Perfection by control. 4. Notation of lien on certificate of title (The only way to perfect a security interest in an automobile is for the secured party to note its lien on the certificate of title. 5. Filing a financing statement |
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Contents financing statement
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1. Debtors Name (found through search logic)
-individual's name-individual name -corporation-corporate name -partnership-partnership name 2. Description of Collateral 3. Secured Party's Name 4. Real Property 5. Debtor authorization (no signature) 6. Security agreement may be filed. |
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Where to file a filing statement
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1. Secretary of state
2. Real estate in the county where located. Individual-principal place of residence organization-state where the organized. |
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Moving
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A. The secured party will become unperfected 4 months after the debtor's move unless it files a financing statement in the new jurisdiction before that.
B. The secured party will become unperfected 1 year afte the collateral moves unles it files a financing statement in the new jurisidction before that 1 year period is up. |
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Continuation Statement
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-financing statement's only last 5 years.
-must be filed within the last 6 months of the five year life. |
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Perfection as to proceeds
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perfected as to the proceeds for 20 days unless:
Cash trade for other collateral |
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Perfected Secured Party v. Perfected Secured Party
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The First to file or perfect, which occurs first, has priority.
Exceptions PMSI in Consumer Goods or Equipment (if perfected at possession or within 20 days) wins. |
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PMSI v. PMSI
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Seller purchase money security interest has priority over a lender purchase money security interest.
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Security interest perfected by control (investment property) v. any other way of perfection
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control wins
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Deposit accounts
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A security interest perfected by control has priority over a security interest perfected via proceeds.
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Secured party v. Buyer of the collateral (Authorized Sales)
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If authorized the buyer takes free of the security interest. Express or implied.
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Secured party v. Buyer of the collateral (unauthorized sales)
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A buyer in the ordinary course of business (other than a farming) take free of security interest created by his seller even though the security interest is perfected and even though the buyer knows of its existence.
-A buyer in the ordinary course means a person who buys good in good faith, without knowledge that the sale violates the rights of another person (usually the secured party) in the goods, and in the ordinary course from a person in the business of selling goods of that kind. |
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Consumer v. Consumer v. Security Goods
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Buyer takes free even if perfected if he buys without knowledge, for value, and for his own personal purposes, unless prior to the purchase the secured party has filed a financing party has filed a financing statement covering such goods.
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Secured party v. Judgment lien holders
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first to levy or perfect.
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PMSI v. Lien Creditor
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If the secured party files with respect to a purchase money security interest within 20 days after the debtor receives possession of the collateral, he takes priority over the rights of a lien creditor which arises between the time the security interest attaches and time of filing.
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Self Help
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Entitled to repossess without breaching the peace.
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