Perfection

Question 1

What does perfection of an SI create?

Answer 1

Superior rights in the collateral for secured party over third parties’ rights in the collateral.

Question 2

What are the 3 requirements if a SI is perfected by filing of a financing statement?

Answer 2

1. Debtor’s name on current driver’s license or state-issued ID;
2. Secured party’s name; and
3. Description of collateral

Question 3

What Debtor’s name is used when perfecting a SI through filing a financing statement?

Answer 3

Name shown on public organic records

Question 4

What happens where a Debtor changes their name on the filing of a financing statement for perfection?

Answer 4

4 months to amend the financing statement

Question 5

What happens when a debtor does not amend their financing statement within 4 months after a name change?

Answer 5

Collateral acquired by the debtor after 4 months isn’t covered

Question 6

What happens if there is an error in the debtor’s name on a financing statement filed for perfection?

Answer 6

Financing statement is ineffective unless a standard search under the debtor’s correct name would disclose the statement

Question 7

What is the scope of a description required in the filing of a financial statement for perfection of an SI?

Answer 7

Super-generic and doesn’t need to be specific

Question 8

Is the debtor’s authorization required in the filing of a financial statement for perfecting an SI?

Answer 8

Yes but can be achieved without having to sign through consent or the security agreement

Question 9

What is the filing location for a financial statement used for perfecting a SI?

Answer 9

Local filing for real property and the debtor’s location for all other collateral

Question 10

What is the effective date of filing for a financial statement used for perfecting a SI?

Answer 10

Upon delivery to the filing office and tender of the filing fee

Question 11

What is the length of perfection by filing a financing statement?

Answer 11

5 years but is unlimited for public-finance transactions

Question 12

Continuation Statement

Answer 12

Extends perfection for an additional 5 years

Question 13

What are the 3 different types of automatic perfection in an SI?

Answer 13

1. PMSI;
2. New value given under an authenticated security agreement from 20 days of attachment; and
3. Proceeds 20 days from attachment

Question 14

What happens when the collateral is delivered to the debtor for the purpose o selling or exchanging it?

Answer 14

The SI in the collateral remains temporarily perfected for 20 days

Question 15

What happens when the debtor moves to another state?

Answer 15

4 month grave period for a perfected SI