Attachment

Question 1

Attachment has 3 requirements

Answer 1

1) Value given (debt); 2) debtor has rights to collateral; and 3) debtor must have authenticated a security agreement that provides adequate description of the collateral

Question 2

Authenticated

Answer 2

signed or otherwise assented to - oral ok if debtor agrees to put collateral in creditor’s possession

Question 3

Description

Answer 3

Use of categories - reasonably identify (exception - consumer transactions require more specificity)

Question 4

After Acquired collateral

Answer 4

usually includes property acquired later (exception - consumer transactions only if consumer acquires property w/in 10 days of value having been give)

Question 5

Future Obligations

Answer 5

CAN be secured

Question 6

Proceeds

Answer 6

Automatic security interest in whatever the debtor receives for or on account of the collateral

Question 7

Do perfected security interests follow property to new owners?

Answer 7

Yes - unless creditor consents to a release. Result - collateral often doubles - creditor has interest in proceeds AND property

Question 8

Inadvertent Attachment (2 types)

Answer 8

1) Disguised sale; and 2) Consignment

Question 9

Disguised Sale (leases)

Answer 9

Where the lessor has no expectation of reversion of value - ex. lease for ENTIRE useful life of property or option to buy for nominal value

Question 10

Consignment

Answer 10

Non-consumer goods worth more than $1000