Chapter 16

Question 1

Transactions where a debtor pledges personal property or fixtures to a creditor as a security for a loan or another obligation

Answer 1

Secured transactions (chattel mortgages)

Question 2

What is a chattel

Answer 2

Item of personal property rather than real estate

Question 3

Includes all property except real estate and items attached to real estate

Answer 3

Personal property

Question 4

Liens on personal property which secures payments of an obligation

Allows sale of collateral if there is a defaults

Answer 4

Security interest

Question 5

Interest in property which typically gives a creditor the right to sell property on default

Answer 5

Lien

Question 6

Examples of liens

Answer 6

Mortgages
Security interest
Some court judgements

Question 7

Personal property items permanently attached to real estate

Answer 7

Fixtures

Question 8

Transfers a security interest in personal property and create a secured transaction

Answer 8

Security agreement

Question 9

Perosnal property or fixtures subject to a security interest

Answer 9

Collateral

Question 10

Creditor who is the holder of the security interest

Answer 10

Secured party

Question 11

Process which causes a security interest to be enforceable against a certain piece of collateral

Answer 11

Attachment

Question 12

Process which fixes the secured party’s level of priority to the collateral against others who also have a lien

Answer 12

Perfection

Question 13

Written notice of a security interest filed with a government office

Answer 13

Financing statement

Question 14

3 Types of collateral governed under article 9

Answer 14

Goods
Quasi tangibles
Intangibles

Question 15

Article _____ covers the collaterals : goods, quasi tangibles and intangibles

Answer 15

9

Question 16

What are goods under article 2

Answer 16

Things tangible and movable

Furniture, business equipment

Question 17

What are goods under article 9

Answer 17

Includes fixtures

Question 18

Documents which in themselves are evidence of a legal right

Answer 18

Quasi tangibles

Question 19

Example of quasi tangibles

Answer 19

Negotiable instruments

Question 20

Items of personal property with no aspect of physical existence

Answer 20

Intangibles

Question 21

2 examples of intangibles

Answer 21

Accounts receivable

Goodwill of a business

Question 22

Does article 9 of UCC apply to real estate ? Perfection of security interest in motor vehicles ?

Answer 22

No

No

Question 23

Is attachment of security interest in and repossion of motor vehicles governed under article 9?

Answer 23

Yes

Question 24

3 requirements for attachment of security interest

Answer 24

1. Written security agreement or secured party takes possession of collateral
2. Secured party must give value (past or present consideration )
3. Debtor must have rights in the collateral

Question 25

3 ways to perfect a security interest

Answer 25

1. Take possession of the collateral 2. Attachment of security interest 3. Filing a financing statement

Question 26

What is a PMSI

Answer 26

Purchase money security interest

Question 27

Secures collateral that is purchased with money or credit supplied by the secured party

Answer 27

Purchase money security interest

Question 28

Written notice of the security interest

Answer 28

Financing statement

Question 29

___________ is the required method for perfection of most business transactions

Answer 29

Financing statement

Question 30

Financing statements are generally filed eith who

Answer 30

The secretary of state's office

Question 31

Security interest which switch from one piece of collateral to another OR Use the same collateral to secure more than one advance of money by a lender

Answer 31

Floating liens

Question 32

3 types of floating liens

Answer 32

Security interest in Proceeds After acquired property Future advances

Question 33

What do proceeds consist of

Answer 33

Whatever is received in exchange for the collateral

Question 34

Property which is purchased by the debtor after the attachment of the original security interest

Answer 34

After acquired property

Question 35

Loans to be made by the secured party in the future m after the original security agreement is signed

Answer 35

Future advanced

Question 36

Statement that obtains all 3 types of floating liens

Answer 36

" this security interest covers proceeds, after acquired property and future advances "

Question 37

Who has the highest priority of security interest

Answer 37

A buyer in the ordinary course of business

Question 38

Example of buyer in the ordinary course of business

Answer 38

Buyer who buys a few items from a retail or wholesale seller

Question 39

Is a buyer who buyers a high percentage of the sellers inventory considered a buyer in the ordinary course of business ?

Answer 39

No

Question 40

_______ rule states that if perfection is only by att scheme the someone who purchases the collateral from the consumer will nkt be subject to the security interest

Answer 40

Garage sale rule

Question 41

Creditor who obtains a lien upon property of the debtor because of a judgement

Answer 41

Lien creditor

Question 42

A ______ in bankruptcy is a lien creditor

Answer 42

Trustee

Question 43

4 rights the creditor has for a debtor who fails to pay

Answer 43

Repossession Repossession sale Retain collateral Ignore the security interest and sue on the promissory note

Question 44

Most common option for creditor when dealing with a debtor who fails to pay

Answer 44

Repossession

Question 45

2 requirements for actual repossession

Answer 45

1. Must give notice to debtor to cure any default | 2, without a breach of peace

Question 46

When does a breach of peace occur

Answer 46

If party breaks into area that the other expects to be private or uses violence/threat to obtain possession of collateral

Question 47

Will the court allow any trespasses onto real estate for repossession ?

Answer 47

Yes minor

Question 48

Example of repossession sale (4)

Answer 48

Auction Advertised sale Sealed bids Sale by a car dealer

Question 49

The party may not retain the collateral in a consumer transaction if more than ___% if the purchase price has been paid

Answer 49

60

Question 50

Highest to lowest priority for how proceeds will be divided after repossession sale (4)

Answer 50

1. Expenses of repossession sale (attorney fees, fees involved in reposessing, holding snd preparing collateral for sale) 2. First lien holder 3. inferior lien holder 4. Debtor

Question 51

T or F. If creditors don't file termination statements are they liable for damages to the debtor ?

Answer 51

T

Question 52

T of F. Landlords are liable for inadequate security in high crime areas

Answer 52

True