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34 Cards in this Set
- Front
- Back
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What law govern's Secured Transactions?
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UCC-9
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What are the requirements for a Security Interests to Attach?
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1)Value 2) Debtor has rights in Collateral 3) Security Agreement is created
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Evidence of Security Agreement (Statute of Frauds)
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1) Agreement +Creditor Possession
2) Agreement in Authenticated Record |
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What is required in the Authenticated Record?
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1) Reasonable description of the collateral
2) Language describing security for debt 3)Security interest attaches to after acquired collateral =OK 4) Security interest Attaches to Identifiable Proceeds 5) Agreement can provide for future advances |
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3 General Rules:
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1) Debtor can transfer rights to the collateral
2) The Security interest follows the collateral (unless otherwise stated) 3) Generally the Original Secured Party Wins (First in time=First in right) |
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What law govern's Secured Transactions?
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UCC-9
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What are the requirements for a Security Interests to Attach?
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1)Value 2) Debtor has rights in Collateral 3) Security Agreement is created
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Evidence of Security Agreement (Statute of Frauds)
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1) Agreement +Creditor Possession
2) Agreement in Authenticated Record |
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What is required in the Authenticated Record?
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1) Reasonable description of the collateral
2) Language describing security for debt 3)Security interest attaches to after acquired collateral =OK 4) Security interest Attaches to Identifiable Proceeds 5) Agreement can provide for future advances |
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3 General Rules:
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1) Debtor can transfer rights to the collateral
2) The Security interest follows the collateral (unless otherwise stated) 3) Generally the Original Secured Party Wins (First in time=First in right) |
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What is a perfected Interest?
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It gives the secured party rights against other third parties
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How can you perfect?
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You can perfect through 1) a financing statement, 2) possession, 3) control, or 4) automatically
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What do you need in a financing statement?
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1) Parties names
2) Super generic indication of the collateral 3) Authorization by debtor in writing |
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Where do you file a financing statement?
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1) Individuals you file it in their state of principal residence
2) Organizations: PPB or their chief office |
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What can you perfect through possession?
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Tangible goods, chattel paper, and negotiable instruments
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What do you perfect by control?
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Investment property, deposit accounts, electronic chattel paper, letters of credit
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What is automatically perfected?
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1) PMSI in Consumer Goods
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What is PMSI?
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Stands for Purchase Money Security Interest: It means money lent to debtor to buy collateral or 2) Seller financing
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What are the "temporary rules"?
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1) 20 days for proceeds
2) Beyond 20 days must perfect, or file in same office 3) 4 months after debtor relocates if debtor's location govern's perfection |
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What are the rules for Priorities?
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1) Unperfected secured parties: First to attach
2)perfected v. unperfected= perfected wins 3) two perfected=first to perfect 4) PMSI have super priority |
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What are the special PMSI perfection rules?
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PMSI in inventory wins if 1) perfect at debtor possession,and 2) notice to prior creditors
PMSI in equipment wins if 1) Perfected before or within 20 days after debtor gets perfection PMSI v. PMSI: Seller always wins, otherwise first to perfect |
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What is the Special Chattel Paper priority rule?
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Like a BFP in property
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When does a buyer take free of a security interest?
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If he 1) gives value
2)Without knowledge 3) BEFORE PERFECTION |
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When can a Buyer beat a perfected interest?
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1) Buyer buys in ordinary course of business,
2) Seller engaged in goods of the kind 3)Buyer doesn't know sale violates SP's rights |
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How can a buyer beat a security interest in a Consumer to Consumer sale?
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1) Buyer no knowledge 2) Gives value 3) goods are consumer goods 4) BEFORE secured party files
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What are the two rules for Bankruptcy?
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1) Perfected secured creditors beat the trustee
2) Unperfected secured creditors lose to the trustee |
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What are the two basic rules regarding Repossession?
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1) After default 2) Breach the peace (residence =big factor)
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What requirements do you have to meet to sell the collateral?
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1) Commercially Reasonable
2) Private or Public 3) Notice of the sale to debtor or surety |
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What is the order of distribution after a sale of collateral?
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1) Expenses 2) Secured Debt paid 3) Junior Liens paid 4) Surplus=debtor gets balance 5) deficiency=debtor gets sued
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What do you have to do to retain the collateral (Strict Foreclosure)?
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1) proposal to debtor 2) acceptance by debtor 3)Fully satisfies the debt 4) Partial satisfaction ok for non consumer goods (debtor is liable on balance)
Note: This is not allowed for consumer goods 60% or more paid off |
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What are the two rules of a Right to Redemption?
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1) Anytime before disposition
2) Pay all obligations + expenses |
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What happens when you fail to comply with the code in disposition?
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1) Creditor liable for actual damages
2) Presumption that the collateral is worth the amount of the debt |
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What is a Surety?
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Person who answers for the debt of another
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What are the 4 rules of sureties?
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1) can always recover from primary debtor
2) subrogated to any lien the principal gave to the ayee 3) Creditor impaired the collateral, surety's obligation is reduced 4) Surety has the same rights under Art 9 as the debtor |
