5. Default Flashcards

You may prefer our related Brainscape-certified flashcards:
1
Q

How many remedies can secured party choose?

A

One

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
2
Q

What is required for creditor to repossess collateral?

A

NOT breach peace (not defined in Art 9)

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
3
Q

What is required for creditor to sell collateral by foreclosure?

A

1) Default
- Security agreement (failure to repay/maintain insurance)
- Art 9
- Lien statute

2) Commercially reasonable sale
- Sufficient advertising
- Contacting market customers
- Cleaning/Repair
- Convenient time + place (public auctions)
- Avoid low price (best efforts to obtain best price)

3) Notice
- To debtor, sureties, other secured creditors
- Reasonable time (10 days notice for non-consumer goods)
- Details (parties, collateral, sale method + time)

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
4
Q

What are the consequences of foreclosure?

A

1) Debtor transfers ownership rights to Buyer

2) Buyer discharges obligations
- Foreclosing creditor
- Subordinate creditors
- NOT superior creditors

3) Debtor to pay deficiency judgment to Foreclosing creditor

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
5
Q

What is required for judicial actions?

A

1) Claim amount due

2) Levy on collateral after judgment

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
6
Q

What is required for retention of collateral?

A

Consumer goods

  • If Debtor paid less than 60% => Creditor can retain goods
  • If Debtor paid more than 60% => Creditor must retain + sell goods within 90 days after possession

Tangibles

1) Retain goods after Debtor’s partial satisfaction
2) Seek deficiency judgment

Intangibles

1) Retain goods after Debtor’s full satisfaction
2) Written notice to Debtor
3) Either;
- Debtor consents => Creditor can retain collateral
- Debtor objects => Creditor must sell collateral

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
7
Q

What are Creditor’s liabilities if he breaches Article 9?

A

Consumer goods

1) Debtor may recover at least 10% (cash price)
- Rebuttable presumption rule (debt = collateral)
- Absolute bar rule (no deficiency)
- Setoff rule (deficiency minus damages)
2) Debtor may recover interest charged on loan

Non-consumer goods
- Creditor’s debt amount equals collateral value (rebuttable presumption rule)

Creditor may lose right to deficiency judgment

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
8
Q

Which party can redeem goods?

A

Debtor

Surety

Creditor

Lienholder

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
9
Q

What is required for redemption of goods?

A

1) Redeem before sale/discharge of debt

2) Pay all obligations + additional expenses

How well did you know this?
1
Not at all
2
3
4
5
Perfectly