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32 Cards in this Set
- Front
- Back
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What is the first sentence you say for Secured Trans?
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These transactions are covered by UCC Article 9 because they involve security intersets in personal property (and fixtures)
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To create a security interest in collateral, the secured party must complete ____.
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Attachment
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What are the required steps for attachment?
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(1) the SP must give VALUE
(2) the debtor must have rights in the collateral (3) the debtor must either sign a security agreement or give physical possession of the collateral under an oral security agreement |
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What are the requirements for a valid security agerement
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(1) in writing
(2) signed (3) create a security interest in the collateral (4) properly describe the collateral |
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What is the requirement for identification of the collateral?
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Identification of the collateral must be particular enough to identify the collateral.
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What is the rule with creating a security interest in future-acquired collateral?
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Article 9 allows a party to create an SI in future acquried collateral and the lien attaches upon ownership of the debtor.
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What does the rule for creating a security interes tin future-acquired collateral exclude?
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consumer goods taken as additional collateral 10 days after attachment.
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What is a purchase moeny security interest?
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A PMSI secures repayment of the loan or credit by giving the debtor the loan to enable him to buy the specific piece of collateral.
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Perfection always requires ___.
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Attachment.
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Perfection can be done in one of the following three ways:
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(1) automatically if the secured party has a PMSI
(2) by giving physical possession of the collateral under an oral SA (3) by filling a financing statement |
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If choose to perfect by filing a financing statement, where must the financial statement be filed?
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Department of Licensigns (DOL)
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What must a financing statment include?
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names and addresses (trade names are sufficient) of the SP and the debtor, indicate the collateral (general descriptions are acceptable), and be signed by the debtor
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What is the general rule regarding when a buyer takes free of or subject to a security agreement?
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Generally, a buyer takes free of an unperfected security interest, but subject to a perfected security interest. However, there is an exception if the buyer is in the ordinary course of business.
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What are the requirements for a buyer in the ordinary course of business?
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BIOCB must (1) pay value; (2) purchase without knowledge that it violates the security interest; (3) must purchase in the ordinary course of the DEBTOR'S business
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What is the significance of a BIOCB?
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A BIOCB will take free of a perfected security interest if meets all requirements.
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What is the general rule of priorities?
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A PMSI has priority over a perfected SI, which has priority over an unperfected SI.
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Who has priority between equal security interests?
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first to file
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What has "superpriority"?
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A PMSI in INVENTORY IF they file and give notice to other secured parties before the debtor obtains the collateral.
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When will a PMSI in Inventory have superpriority (i.e., what is required)?
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msut (1) file and (2) give notice to other secured parties BEFORE the debtor obtains the collateral
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What is a secured party's remedy for breach?
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The secured party may use self help without breaching the peace. Otherwise, they may use judicial replevin (respossession).
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Can a secured party sell collateral after breach and repossession? If yes, what is required?
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Yes, but must give (1) notice to the debtor, (2) at a commercially reasonable public or private sale.
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How are proceeds of a sale of collateral treated? What is the order in which they are dispursed?
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The proceeds of the sale must be applied (1) to the costs of the sale; (2) repayment of the debt; (3) junior creditors; (4) proceeds must go to debtor
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What is the secured party's other options besides a commercially reasonable sale?
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The secured party may also give notice to the debtor and keep the collateral in full satisfaction of the debt, unless the debtor objects WITHIN 21 DAYS.
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What is a Lender PMSI?
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requires that the secured loan be made for the purpose of acquiring the collateral and the funds were actually used for that.
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What is a Seller PMSI?
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occurs when the secured credit provided by the seller permitted the debtor to acquire the collateral.
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What are the four main ways to perfect a security interest?
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(1) Automatic Perfection
(2) Perfection by Possession (3) Motor Vehicle Perfection (4) Perfection by Filing |
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What is automatic perfection?
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A PMSI in consumer goods is automatically perfected.
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What is perfection by possession?
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A secured party is perfected only for so long as she possesses the collateral pursuant to a written or oral agreement.
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What is motor vehicle perfection?
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requires endorsement on certificate of title.
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What is perfection by filing?
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Did The Debtor Sign Or Authorize A Financing Statement? Perfection requires attachment plus filing a financial statement signed or authorized by the debtor, with proper names/addresses of the parties, indicating collateral, & filed in the correct place (Dept of Licensing for everything except fixtures, which are filed with County Auditor’s Office).
By signing the SA, the debtor automatically authorizes the FS. |
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What is the general rule for proceeds?
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A security interest that has attached will remain perfected in cash proceeds, keeping the same priority, for as long as they are identifiable (until they become untraceable or debtor spends them).
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What is the general rule for proceeds?
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Proceeds of the sale are applied to the secured party’s expenses of sale & the secured debt; then to junior secured parties; and any surplus goes to the debtor, who remains liable for any deficiency.
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