Debtor-Creditor Relationships Flashcards
What is subrogation?
Rights of surety after they pay (debtor and creditor has the same rights)
What is exoneration?
Rights of surety to force principal debtor to pay
What is reimbursement?
Right of surety to collect from principal debtor
What is contribution?
Rights from cosureties
What is the 60% Rule?
Creditor must sell collateral if debtor has paid 60% of cash price of collateral (90 days)
What is perfection of a security?
A means by which a secured party gains priority to a debtor’s collateral over third parties who claim to have an interest in the same collateral.
What are the methods of perfection?
Filing
Possession
Automatic
Temporary
When can a financing statement be filed?
Before a security agreement is made or a security interest is attached
Before debtor authorization is required
Before authentication of a security agreement
When does perfection occur/
Upon communication of a financing statement and tender or filing fee
A perfected secured party’s interest has priority over which parties?
Unsecured creditors Unperfected secured parties Lien creditors Judgement creditors Trustees in bankruptcy
Who wins in case of Perfected secured creditor vs. buyer in the ordinary course of business?
Buyer
A buyer not in the ordinary course of business of consumer goods will prevail over a previously perfected secured party attachment, if the buyer can prove which 4 requirements?
Buyer must give value to the seller/ debtor
Buyer must not know of the secured party interest
Buyer must buy for personal use
Buyer must but before the secured party perfects the filing
What is a Chapter 7 Bankruptcy?
Can be used for individuals and corporations
12 or more unsecured creditors with 3 or more with claims $15,775 can file
less than 12, with 1 creditor with $15,775 can file
What is Chapter 12 Bankruptcy?
For the following entities:
Farming - $4,153,150
Fishing - $1,924,555
What is Chapter 13 Bankruptcy?
Used by individuals
