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7 Cards in this Set
- Front
- Back
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Attachment and Perfection
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under art 9 of UCC, creditor may properly obtain a security interest in collateral as a means to secure a loan given to a debtor. TO OBTAIN A VALID SECURITY INTERES IN COLLATERAL THE CREDITOR MUST ATTACH AND PERFECT ITS INTEREST. Attachments secures rights in debtors collateral while perfection gives notice of the creditors rights in the collateral to other parties who may have claims on same collateral.
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Attachment Requires
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1. Creditor extends value to debtor 2. A record or Secuirty agreement memorializing security interest. 3. the debtor must have rights in the collateral. Record or agreement must be authenticated by debtor and reasonablly identify collateral. |
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Perfection is Obtained when....
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by creditor filing a financing statement with the sec. of state that identifies the collateral and his interest. Can also be obtained by taking possession or control of the collateral that is providing the security interest. when creditor extensts calue to debtor for purpose of enabling debtor to acquire rights , a PURCHASE MONEY SECURITY INTEREST ARISES. |
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PMSI
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in consumer goods, enjoys auto attachment under art 9 of UCC and creditor need not execute security agreement to attach his PMSI to debtor. Special protection given to encourage lending to consumers.
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Priority of Perfected Creditors : 1st in time, 1st in right
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Filing is key - perfected when filing and holds priority. |
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Unperfected Creditor Vs Buyer of goods
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if interest is perfeted then the prefected creditor has priority over all other creditors EXCEPT that of a buyer in normal course of commerce. If Vs Donee then perfected wins.
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Self Help Remedies for Secured Creditors
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under art 9 UCC, holder of SI has right to engage in self help repossession upon default of the debtor if doing so would not BREACH THE PEACE. Breach is when possessor of the chattel obkects in any way to the taking of the chattel .once this occurs must seek writ of replevin from court. Art 9 doesnt protect form any claims arising from breach of peace.
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