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21 Cards in this Set
- Front
- Back
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ST: When does a PMSI for non-consumer goods not lose its status? |
1. SI also secured with other property.
2. Collateral also covers future advances in addition to purchase money. 3. PMSI has been refied or consolidated. |
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ST: What are the requirements for attachment?
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1. Parties must agree to create SI.
2. Value. 3. Debtor must have rights in the collateral. |
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ST: How is an agreement to create a security interest manifested?
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1. Creditor takes possession of the collateral, or
2. Debtor's authentication of a security agreement. 3. Creditor takes control of certain types of collateral. |
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ST: Over which collateral may a creditor gain control?
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1. Nonconsumer deposit accounts.
2. Electronic chattel paper. 3. Electronic documents. 4. Investment property. |
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ST: What is the purpose of attachment?
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Establishes secured party's rights in the collateral against the debtor.
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ST: What is the purpose of perfection?
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Establishes secured party's rights in the collater as against third parties.
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ST: What are the requirements for perfection?
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1. Attachment and:
2. One of the following: a. Filing of a financing statement. b. Taking possession of collateral. c. Taking control of the collateral. d. Automatic perfection (i.e. PMSI) e. Temorary perfection (SI in proceeds from sale of collateral.) |
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ST: What must be remembered about the timing of perfection and attachment?
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A SI may be perfected before attachment; time of perfection is time of attachment.
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ST: How long is a financing statement good for? May an extension be filed? When?
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1. Five years.
2. Yes, for another five years. 3. Within six months before the lapse of the original statement. |
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ST: What is the only type of PMSI that is automatically perfected?
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PMSI in consumer goods.
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ST: What date determines priority?
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The date of filing or perfection. NOT the date of attachment.
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ST: What is the exception to the first to file or perfect rule?
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Perfection by control has priority over perfection by any other method regardless of date.
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ST: When can a PMSI in equipment be perfected for superpriority?
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Usually by filing, any time within 20 days after debtor gets possession of the collateral.
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ST: When can a PMSI in inventory be perfected for superpriority?
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Usually by filing, by the time the debtor gets possession of the collateral; others with SI in the inventory must be given written notice.
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ST: Does a buyer or leaser have priority over an unperfected secured interest?
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Yes, if they buy without knowledge of the security interest.
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ST: Who has priority, a perfected SI or a possessory lien?
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The lien.
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ST: What pages should be memorized about priorities?
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Pages 19-20 of the Conviser.
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ST: What is the major issue if reasonableness of the sale is brought up?
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Secured party must show that it made an effort to obtain the best price for the collateral.
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ST: What are the factors showing that a secured party made an effort to obtain the best price for collateral?
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1. Sufficiency of the advertising.
2. In a limited market, if the people in that market were contacted. 3. Whether the collateral needed cleaning or repair. 4. If the sale was by public auction, the convenience of the time and place. |
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ST: For nonconsumer transactions where the value of the collateral sold results in a deficiency, what is the rule?
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The "rebuttable presumption rule", that the value of the collateral is presumed to equal the amount of the debt, which a proper sale would reflect.
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ST: What does the "absolute bar rule" state?
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For consumer transactions, the secured party may not claim a deficiency.
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