Exam Rules - Secured Transactions

Question 1

What are goods

Answer 1

Items that are moveable

Question 2

What is required for attachment

Answer 2

(1) value (2) the debtor has rights in the collateral (3) a security interest describing the collateral or secured party exercises control/possession

Question 3

How much does a mechanics lien give you

Answer 3

$1,000 and the rest is subordinated to a senior perfected interest

Question 4

When can a filing office refuse a financing statement

Answer 4

Failure to (i) pay the required fee, (ii) submit the financing statement by an authorized method, or (iii) identify the debtor

Question 5

How long is an interest perfected for

Answer 5

5 years

Question 6

What are the priorities of creditors

Answer 6

Secured parties, unsecured general creditors, judicial lien creditor

Question 7

How can a creditor perfect an interest in a checking account

Answer 7

(1) the secured party is the bank with which the deposit account is maintained; (2) the bank, secured party, and debtor agreed in writing to follow the instructions of the secured party; or (3) the secured party becomes the bank’s customer with respect to the deposit account.

Question 8

How can collateral be perfected

Answer 8

(1) filing a financing statement; (2) possession of the collateral; (3) control over the collateral; and (4) automatic perfection.