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36 Cards in this Set

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What are the two (2) things you look for in a Secured Transactions Question?
1. a Loan or Security Interest secured by some type of collateral.

2. a dispute between 2 or more creditors.
What is the definition of a Security Interest?

- WORD FOR WORD (know this cold)!
- One party (creditor),

loans or extends credit to another party (debtor),

and the creditor obtains an interest in the property (collateral) of the debtor.
What part of the UCC governs Secured Transactions?
Article 9
Collateral: Three (3) types of Collateral?
1. Goods

2. Quasi-Tangible Property

3. Intangible Property
Collateral: Four (4) types of "goods" property used as collateral?

[F.I.C.E.]
F = Farm Products

I = Inventory

C = Consumer Goods

E = Equipment
Collateral: Four (4) types of "quasi-tangible" property used as collateral?
1. Instruments

2. Documents

3. Chattel Paper

4. Investment Property
Collateral: Three (3) types of "Intangible" property used as collateral?
1. Accounts Receivable

2. Deposit Accounts

3. General Intangibles (catch-all).
Attachment:

What are you trying to do in attachment?
Making a Security Interest ENFORCEABLE.


- If a Security Interest is NOT enforceable, then the creditor May Not Repossess the Collateral!
Attachment: What are the Four (4) Elements of Attachment?
1. Writing

2. AGREEMENT

3. Secured Party gives VALUE.

4. Debtor must have RIGHTS IN THE COLLATERAL.
Attachment: "Content of the Agreement" - What three (3) things must the agreement contain?
1. Intent to create a security interest,

2. Authentication (signature),

3. A description of the collateral.
Collateral: Does collateral include "After-Acquired Property"?
It may.

- parties should have a clause

Exception: consumer goods - only if purchased 10 days after value is given by the secured party.
Collateral: What is the "Proceeds Doctrine"?
- Unless otherwise agreed, secured party always has a right to proceeds of the named collateral.
Perfection: What is the main idea of "perfection"?
- To give the world "notice" that the secured party has an interest in the debtor's property.
Perfection: When is perfection important?
- When there are competing creditors involved.
Perfection: What is the most common type of "automatic perfection"?
- PMSI for the purchase of consumer goods.
Perfection: What are the Five (5) Methods of Perfection?

[P.-F.A.C.T.]
1. Possession

2. Filing

3. Automatic

4. Control

5. Title Certificate
Perfection: What is the most common method of perfection?
- Filing a Financing Statement
Perfection: Where do you file a filing statement?
Secretary of State's Office
Perfection: What three (3) things must the filing statement contain?
1. Debtor's Name

2. Description of the Collateral

3. Secured Party's name
Perfection: Where do you file a filing statement?

What if it is land-related collateral?
- In the state where the debtor is located.

- also file in the county recorder's office where the land is located.
Perfection: As a practical matter, what three (3) other things need to be on a financing statement (besides the main three).
1. Secured Party's address

2. Debtor's address

3. Type of Organization of the debtor.
Priority:

What is the first step in figuring out who has priority?
Classify each Party
Priority: [Secured Party vs. Secured Party] - What is the General Rule in this situation?
- The first to FILE OR PERFECT, whichever occurs first, has priority.
Priority: [Secured Party vs. Secured Party] - Business Equipment: What does a PMSI have to do to have priority?
- Needs to be perfected at the time the debtor receives possession or 20 days thereafter.
Priority: [Secured Party vs. Buyer of Collateral] - "Authorized Sales", Who has priority?
- If the sale is authorized by the secured party, the buyer takes free of the security interest.
Priority: [Secured Party vs. Buyer of Collateral] - "Unauthorized Sales", What is the General Rule?
- Security interests continue even if the collateral is sold.

- The secured party can get the collateral back from whoever has it.
Priority: [Secured Party vs. Buyer of Collateral] - "Unauthorized Sales", What is the exception to the general rule?
- A buyer in the "ordinary course of business" doens't have to give the property back.
Priority: [Secured Party vs. Lien Creditors] - When does the secured party have priority?
- If they have "perfected" prior to the lien creditor.
What is a lien creditor?
- a creditor who has acquired a lien on the property involved in the attachment.
PMSI vs. Lien Creditor - Who has priority?
If the PMSI files within 20 days from when the debtor receives the property.
Secured Party vs. Statutory Lien Holders - Who has priority?
Statutory Lien Holders
Self-Help Repossession: A secured party can take possession of the collateral unless...?
It cannot be done without a "breach of the peace".
If Self-Help is unavailable, what judicial process should the secured party use?
- Replevin
Resale of Collateral: Five (5) main points on resale.
1. Must give Reasonable Notification,

2. Commercially Reasonable Sale

3. Secured Party can buy collateral,

4. Right to Deficiency Judgment,

5. Debtor has Right to Redeem.
Priority in Fixtures: Secured Party vs. Subsequent Real Estate Interest - who has priority?
- Secured Party (if perfected).
Priority in Fixtures: Secured Party vs. Prior Real Estate Interest - who has priority?
- Prior Real Estate Interest (if properly recorded).