5. Default

Question 1

Where DR defaults, what are an A9 secured CR’s four options?

Answer 1

1. Self-help repossession
2. Repossesion by judicial action
3. Strict foreclosure
4. Sale

Question 2

_{Self-help repossession}

What must CR never do?

Answer 2

Breach the peace

Question 3

_{Self-help repossession}

What is a breach of the peach?

Answer 3

Acting in any way likely to cause violence

Question 4

_{Self-help repossession}

What is a breach of the peach?

Answer 4

Acting in any way likely to cause violence

Question 5

_{Self-help repossession}

Repossession in the face of what level of protest is a breach of the peace?

Answer 5

Any protest

Question 6

_{Self-help repossession}

What is a constructive breach?

Answer 6

Misusing the law in order to repossess

Question 7

_{Self-help repossession}

What are the penalties for misconduct?

Answer 7

Civil and criminal

Question 8

_{Self-help repossession}

What are CR’s abilities where collateral is in DR’s home and not in DR’s home?

Answer 8

In Home

CR may not enter without voluntary and contemporaneous consent

Outside Home

CR may take absent DR objection

Question 9

_{Strict Foreclosure}

What is strict foreclosure and when is it best used?

Answer 9

CR lawfully retains collateral in full satisfaction of the debt

Best when CR has a use for collateral and collateral value approximates the the debt owed

Question 10

_{Strict Foreclosure}

How can a CR strictly foreclose consumer goods and non-consumer goods?

Answer 10

Consumer Goods

Send written proposal to DR and guarantors

Non-Consumer Goods

Send written proposal to DR, guarantors, any perfected CRs, and other secured parties who have told the foreclosing CR of their interest

Question 11

_{Strict Foreclosure}

What is the consumer goods 60% rule, and what must CR do not to breach it?

Answer 11

Strict foreclosure is not allowed when a consumer debtor has paid more than 60% of the debt

CR must sell the collateral within 90 days or be liable for conversion

Question 12

_Sale

What phrase should we use a lot in essays regarding the standard every aspect of the sale must reach?

Answer 12

Commercially reasonable

Question 13

_Sale

What sort of notice of sale must be given?

Answer 13

Reasonable notice

Question 14

_Sale

What notice forms are presumptively commercially reasonable?

Answer 14

A9 standard notice forms

Question 15

_Sale

To whom must notice be given?

Answer 15

Rules the same as consumer/non-consumer goods in strict foreclosure

Question 16

_Sale

What two things must notice of a public sale contain?

Answer 16

Time and place of sale

Question 17

_Sale

What one thing must notice of a private sale contain?

Answer 17

Date after which the sale will be made

Question 18

_Sale

What two extra things must be included in notice where DR is a consumer?

Answer 18

1. How to calculate deficiency
2. How DR can redeem

Question 19

_Sale

What is the standard for how far in advance notice must be given?

Answer 19

Commercial reasonableness - make the argument

Question 20

_Sale

Can the selling creditor buy at a public sale and private sale? How come?

Answer 20

Public sale: Yes

Private sale: No, unless there are external market checks. Lack of transparency means there is potential for self-dealing

Question 21

_{Deficiency Judgment}

Where there is a deficiency because CR sold at a low price to an insider buyer, what is DR’s recourse?

Answer 21

The actual deficiency is calculated by the price that an independent third party would have paid