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13 Cards in this Set

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  • Back
Purchase Money Security Interest (PMSI)
The creditor sells the goods to the debtor on credit, retaining a security interest in the goods, OR the creditor advances the funds to purchase the goods.
Seller Financed PMSI
Secured party sells D collateral on credit and retains a security interest in the item sold. (Buy a car on credit w/ a SI in the car).
Enabling Loan PMSI
A loan to D that enables the debtor to buy specific collateral, and the creditor takes a security interest in the specific collateral.

Credit or loan proceeds must be used to acquire the collateral.
The legal steps required to give the secured party a security interest in the collateral that is effective as against the debtor. Once a security interest attaches, it is effective against the debtor and the creditor has all of the rights of a secured creditor under article 9.
* A creditor is not a secured creditor until attachment.
The legal steps required to give the secured party an interest in the collateral that is effective as against the world.

The process of giving the world notice of the security interest.
Financing Statement
The document generally used to provide public notice of the security interest, and so to perfect the security interest.
Two main types of Collateral
1) Goods
2) Semi-intangible and intangible goods
Define "goods"
Goods include all things which are movable at the time the security interest attaches.

Tangible, movable, personal property.
Sub-classifications of "goods" (4 of them)
1) Consumer Goods
2) Equipment
3) Farm products
4) Inventory
Define "consumer goods"
Goods used or bought for use primarily for personal, family or household purposes.

Ex: A guitar purchased on credit for a son.
Define "equipment"
Used or bought for use primarily in business.

This is a catch-all provision if it doesn't fit elsewhere.

Ex: Guitar purchased on credit by a professional rock musician.
Define "inventory"
Held by a person who holds them for sale or lease or to be furnished under service contracts; materials used or consumed in a business in a short period of time.

Ex: Automobiles held by a local car rental agency.
Sub-classification of semi-intangible and intangible property. (8)
1) Instruments - promissory notes or checks
2) Documents - bill of lading or warehouse receipts
3) Chattel paper -