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36 Cards in this Set
- Front
- Back
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What are the two (2) things you look for in a Secured Transactions Question?
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1. a Loan or Security Interest secured by some type of collateral.
2. a dispute between 2 or more creditors. |
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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. |
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What part of the UCC governs Secured Transactions?
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Article 9
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Collateral: Three (3) types of Collateral?
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1. Goods
2. Quasi-Tangible Property 3. Intangible Property |
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Collateral: Four (4) types of "goods" property used as collateral?
[F.I.C.E.] |
F = Farm Products
I = Inventory C = Consumer Goods E = Equipment |
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Collateral: Four (4) types of "quasi-tangible" property used as collateral?
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1. Instruments
2. Documents 3. Chattel Paper 4. Investment Property |
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Collateral: Three (3) types of "Intangible" property used as collateral?
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1. Accounts Receivable
2. Deposit Accounts 3. General Intangibles (catch-all). |
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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! |
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Attachment: What are the Four (4) Elements of Attachment?
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1. Writing
2. AGREEMENT 3. Secured Party gives VALUE. 4. Debtor must have RIGHTS IN THE COLLATERAL. |
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Attachment: "Content of the Agreement" - What three (3) things must the agreement contain?
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1. Intent to create a security interest,
2. Authentication (signature), 3. A description of the collateral. |
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Collateral: Does collateral include "After-Acquired Property"?
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It may.
- parties should have a clause Exception: consumer goods - only if purchased 10 days after value is given by the secured party. |
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Collateral: What is the "Proceeds Doctrine"?
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- Unless otherwise agreed, secured party always has a right to proceeds of the named collateral.
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Perfection: What is the main idea of "perfection"?
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- To give the world "notice" that the secured party has an interest in the debtor's property.
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Perfection: When is perfection important?
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- When there are competing creditors involved.
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Perfection: What is the most common type of "automatic perfection"?
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- PMSI for the purchase of consumer goods.
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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 |
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Perfection: What is the most common method of perfection?
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- Filing a Financing Statement
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Perfection: Where do you file a filing statement?
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Secretary of State's Office
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Perfection: What three (3) things must the filing statement contain?
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1. Debtor's Name
2. Description of the Collateral 3. Secured Party's name |
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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. |
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Perfection: As a practical matter, what three (3) other things need to be on a financing statement (besides the main three).
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1. Secured Party's address
2. Debtor's address 3. Type of Organization of the debtor. |
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Priority:
What is the first step in figuring out who has priority? |
Classify each Party
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Priority: [Secured Party vs. Secured Party] - What is the General Rule in this situation?
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- The first to FILE OR PERFECT, whichever occurs first, has priority.
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Priority: [Secured Party vs. Secured Party] - Business Equipment: What does a PMSI have to do to have priority?
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- Needs to be perfected at the time the debtor receives possession or 20 days thereafter.
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Priority: [Secured Party vs. Buyer of Collateral] - "Authorized Sales", Who has priority?
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- If the sale is authorized by the secured party, the buyer takes free of the security interest.
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Priority: [Secured Party vs. Buyer of Collateral] - "Unauthorized Sales", What is the General Rule?
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- Security interests continue even if the collateral is sold.
- The secured party can get the collateral back from whoever has it. |
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Priority: [Secured Party vs. Buyer of Collateral] - "Unauthorized Sales", What is the exception to the general rule?
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- A buyer in the "ordinary course of business" doens't have to give the property back.
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Priority: [Secured Party vs. Lien Creditors] - When does the secured party have priority?
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- If they have "perfected" prior to the lien creditor.
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What is a lien creditor?
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- a creditor who has acquired a lien on the property involved in the attachment.
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PMSI vs. Lien Creditor - Who has priority?
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If the PMSI files within 20 days from when the debtor receives the property.
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Secured Party vs. Statutory Lien Holders - Who has priority?
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Statutory Lien Holders
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Self-Help Repossession: A secured party can take possession of the collateral unless...?
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It cannot be done without a "breach of the peace".
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If Self-Help is unavailable, what judicial process should the secured party use?
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- Replevin
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Resale of Collateral: Five (5) main points on resale.
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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. |
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Priority in Fixtures: Secured Party vs. Subsequent Real Estate Interest - who has priority?
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- Secured Party (if perfected).
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Priority in Fixtures: Secured Party vs. Prior Real Estate Interest - who has priority?
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- Prior Real Estate Interest (if properly recorded).
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