Bar Prep - NY Secured Transactions Flashcards
What is the scope of Article 9?
Applies to consensual security interests in personality and security fixtures.
How does a creditor create an enforceable security interest in debtor’s collateral?
VCR.
Value
Contract
Rights in collateral
Once attached, how does the creditor attain perfection?
Put world on RECORD NOTICE of its existence
Perfection = publicity
When more than one creditor has stake in same collateral, what are rules of priority?
First in time, first in right.
What if debtor DEFAULTS on the debt or obligation?
Creditor has statutory and judicial remedies.
When collateral is real estate, what law applies?
Law of mortgages (NOT art. 9)
When collateral is personalty or fixtures, what law applies?
Article 9
True or false: Personalty = goods
True
True or False: Art. 9 applies to statutory or mechanics liens
FALSE.
Entity who owes $ is…
Debtor
Entity who lends $ is…
Secured party or secured creditor
What is the contract, record or writing that authenticates deal?
Security agreement
Right creditor has in debtor’s in personalty or fixtures known as….
Security interest
What is collateral?
Personalty or fixtures creditor can look to for satisfaction
Collateral most likely appears in what form?
Tangicle collateral or goods, meaning:
Consumer goods Equipment Inventory Farm products Fixtures
What is the key for purposes of classifying tangible collateral?
Primary use in the hands of YOUR DEBTOR (Subjective test).
What does attachment mean?
Is the security interest enforceable?
What are the three requirements for attachment?
Value - must be given by creditor
Contract - call security agreement, must evidence the secured transaction UNLESS the secured party has taken possession of the collateral
Rights
True or False: if secured party is in possession of the collateral, there is no need for a record.
TRUE - (though uncommon) it is more common that debtor is in possession of collateral, – thus need a writing.
What are the requires of a record?
(a) Authenticated by debtor (signed or electronically marked) AND
(b) Reasonably identify collateral
What is an After Acquired Collateral Clause?
AKA - “Floating Lien”
They are enforceable.
What is perfection?
PUBLICITY DEVICE.
Something secured party does to put world on record or constructive notice of secured party’s existence.
**Helps to protect secured party from competing creditors.
How can secured creditor attain perfection?
(a) Taking possession of collateral
(b) Automatic perfection for purchase money security interests (PMSIs) in consumer goods
(c)
What is purchase money security interest?
PMSI - security interest in chattel
PMSI in consumer goods are perfected automatically, upon attachment.