Introduction to Secured Transactions Flashcards
1
Q
seller-financed purchase money security interest (PMSI)
A
- Secured party sells collateral on credit
- Retains security interest in collateral
2
Q
financier-financed PSMI
A
- Loan to purchase collateral
- Loan used to acquire that collateral
- Creditor takes security interest in collateral
3
Q
collateral
A
property subject to a security interest (subject to repossession upon default)
4
Q
security interest
A
- Interest in personal property or fixtures that secures payment or performance of an obligation
- When the contingency occurs, the property interest springs to life, and creditor has rights in the debtor’s collateral
5
Q
after-acquired property clause
A
Grant of a security interest in property obtained in the future
6
Q
future advance clause
A
- Clause that allows creditor to secure future advances in the present secuirty agreement
- New security agreement is not needed when future advance is made
7
Q
attachment
A
- Steps necessary to create security interest effective against debtor
- Creditor is now secured creditor
8
Q
perfection
A
Prcoess of giving public notice of the security interest
9
Q
financing statement
A
Document used to convey notice of security interest
10
Q
tangible collateral (goods)
A
- Consumer goods: personal use
- Equipment: business use (default)
- Farm products: crops, livestock, supplies and their products used in farming operations
- Inventory: for sale or lease; short-term business use; for service contracts
Base classification on debtor’s use
11
Q
intangible & semi-intangible collateral
A
- Instruments: right to be paid $$$
- Documents: right to recieve goods
- Chattel paper: (1) monetary obligation and (2) security interest in specific goods
- Investment property: securities
- Accounts: right to payment for prop. sold, servs rendered
- Deposit accounts: maintained by bank
- Commercial tort claim
- General intangible: catch-all (IP rights, wills, etc.)
