Definitions

Question 1

{Def} Security Interest

Answer 1

Interest in personal property or fixtures that secures performance.

Question 2

{Def} Debtor

Answer 2

(1) has interest in lien and collateral, (2) sells accounts, chattel paper, or promissory notes, OR (3) consignee.

Question 3

{Def} Obligor

Answer 3

(1) owes payment/performance, (2) has offered property as collateral, or (3) is otherwise accountable.

Question 4

{Def} Insolvent

Answer 4

(1) ceased paying debts, (2) is unable to pay debts, or (3) is insolvent per bankruptcy law.

Question 5

{Def} Goods (4)

Answer 5

1. Farm Products
2. Equipment
3. Inventory
4. Consumer Goods

Question 6

{Def} Quasi-Intangibles (6)

Answer 6

1. Money
2. Instruments
3. Documents of Title
4. Letter of Credit Rights
5. Investment Property
6. Chattel Paper

Question 7

{Def} Intangibles (6)

Answer 7

1. Payment Intangibles
2. General Intangibles
3. Torts (Commercial)
4. Healthcare Receivables
5. Accounts
6. Deposit Accounts

Question 8

{Def} Consumer Goods

Answer 8

Goods used or bought primarily for personal, family, or household purposes.

Question 9

{Def} Instrument

Answer 9

Writing or negotiable instrument that indicates a right to payment of monetary obligation that is NOT a security or lease, and is transferred in the ordinary course of business by delivery.

Question 10

{Def} Document of Title

Answer 10

Warehouse Receipt

Question 11

{Def} Letter of Credit Rights

Answer 11

Letter indicating right to credit and payment or performance therefore.

Question 12

{Def} Investment Property

Answer 12

Security, security entitlement, securities account, commodity contract, or commodity account.

Question 13

{Def} Chattel Paper

Answer 13

Record or collection of records that indicate(s) both monetary obligation and security interest or lease in a specific good, software used in good, license for software used in good. NOT charters and/or rights to credit card payment/information.

Question 14

When has attachment occurred?

Answer 14

When (1) creditor has given some value, (2) debtor is empowered to transfer rights in collateral, and (3) debtor has signed security agreement.

Question 15

What are the five (5) ways to perfect a security interest?

Answer 15

1. File a financial statement
2. Creditor possesses collateral
3. Creditor controls collateral
4. Automatic perfection
5. Perfection through state certificate of title system

NOTE: Secure interest proceeds are automatically, temporarily perfected for 20 days.

Question 16

What is required for a financing statement to be properly filed?

Answer 16

1. Debtor’s Name
2. Creditor’s Name
3. Description of Collateral