INTRODUCTION TO THE PURCHASE MONEY SECURITY INTEREST & INTRODUCTION TO PERFECTION, PERFECTION BY FILING, AND WHERE TO FILE Flashcards
Two Version of PMSI
Introduction to the Purchase Money Security Interest & Introduction to Perfection, Perfection by Filing, and Where to File
Version 1: Debtor acquires rights in the property that is itself used as collateral.
Version 2: Debtor acquires a loan used for the express purpose of buying some item that is used as the collateral for the loan, and the loan is actually used for that purpose.
Close Nexus of PMSI
Introduction to the Purchase Money Security Interest & Introduction to Perfection, Perfection by Filing, and Where to File
The concept of PMSI requires a close nexus between the acquisition of collateral and the secured obligation. Thus, a security interest does not qualify as a PMSI if a debtor acquires property on unsecured credit and subsequently creates the security interest to secure the purchase price.
Perfection of Security Interest
Introduction to the Purchase Money Security Interest & Introduction to Perfection, Perfection by Filing, and Where to File
A security interest is perfected if it has attached and all of the applicable requirements for perfection have been satisfied. A security interest is perfected when it attaches if the applicable requirements are satisfied before the security interest attaches.
Methods of Perfection
Introduction to the Purchase Money Security Interest & Introduction to Perfection, Perfection by Filing, and Where to File
- Filling
- Possession of the collateral by the secured party
- Control
- Automatic Perfection
Law governing perfection
Introduction to the Purchase Money Security Interest & Introduction to Perfection, Perfection by Filing, and Where to File
While a debtor is located in a jurisdiction, the local law of that jurisdiction governs perfection, the effect of perfection or nonperfection, and the priority of a security interest in collateral
Where to file for perfection
Introduction to the Purchase Money Security Interest & Introduction to Perfection, Perfection by Filing, and Where to File
A debtor who is an individual is located at the individual’s principal residence
A debtor that is an organization and has only one place of business is located at its place of business
A debtor that is an organization and has more than one place of business is located at its chief executive office
A registered organization that is organized under the law of a State is located in that State
