Perfection

Question 1

General Rule for Perfection

Answer 1

A security interest is perfected when it has attached and all perfection requirements are met.

Question 2

What are the methods of Perfection?

Answer 2

(1) Filing a financing statement
(2) Possession
(3) Control
(4) Automatically

Question 3

What information is needed on the financing statement?

Answer 3

(1) Name of debtor
(2) Name of Secured Party
(3) an indication of the collateral

Question 4

Where is the financing statement usually filed?

Answer 4

where the debtor is located

Question 5

What do you rely on for the name of the debtor?

Answer 5

-Public Organic Record (businesses)
-State-issued DL not-expired

Question 6

When will minor errors render a filing insufficient?

Answer 6

(1) When the error is seriously misleading
-Getting a debtor’s name wrong on the financing statement is seriously misleading (unless the incorrect name can be used in search logic to find the correct)
(2) misidentifying the collateral can be seriously misleading
-wrong serial number was seriously misleading while leaving out a hyphen was not.

Question 7

Who long is a financing statement good for?

Answer 7

Five years
-Continuation statement filed within 6 months of expiration is also good for 5 years
-Amendments do not extend

Question 8

How long does the SP have to file a new financing statement once a debtor has moved?

Answer 8

4 months otherwise it lapses

Question 9

How long does the SP have to amend a financing statement once the debtor’s name has changed?

Answer 9

4 months

Question 10

What type of collateral can a SP perfect its security interest by possession?

Answer 10

-tangible negotiable documents, goods, instruments, money, tangible chattel paper(money), certificated securities

Question 11

Possession of tangible chattel paper

Answer 11

The SP must take possession of all the originals and even “pristine copies” to put subsequent creditors on inquiry notice.

Question 12

Is possession interrupted when police seize collateral pursuant to a warrant?

Answer 12

No…unclear if without a warrant

Question 13

What type of collateral can a SP perfect by control>

Answer 13

Deposit accounts, electronic chattel paper, investment property

Question 14

Security interest in deposit account

Answer 14

MUST be perfected by control

Question 15

How does a SP have control of a deposit account>

Answer 15

(1) SP is the bank of which the account is managed
(2) D, SP, and Bank have agreed in an authenticated record that the bank will comply with instructions originated by the secured party
(3) SP becomes the bank’s customer with respect to the deposit account (joint account)

Question 16

What type of collateral is automatically perfected?

Answer 16

A PMSI in consumer goods is automatically perfected
-the mere fact that it is a consumer good is enough to put a subsequent creditor on notice
-Only exception is when consumer goods are governed by a certificate of title statute

Question 17

How to perfect collateral with certificate of title?

Answer 17

must note on lien on the certificate of title

Question 18

What is the time window to perfect instruments and documents after attachment?

Answer 18

20 days