perfection of security interest Flashcards
methods of perfection
- Filing
- Taking Possession of the collateral
- control
- automatic perfection
- temporary perfection
time of perfection
security interest is not enforceable against anyone until it has attached to the collateral.
PSMI In consumer goods
A PMSI in consumer goods is perfected as soon as it attaches.
security interest in motor vehicles
can be perfected only by notation on the vehicle’s certificate of the title.
perfection by taking posession
this is called a pledge, perfection occurs when you take actual possession of the collateral.
which interest cannot be perfected by possession?
general intangibles, deposit accounts, nonnegotiable documents, electronic chattel paper, certificate of title goods, and accounts cannot be perfected by possession.
perfection by control
Security interests in investment property, non consumer deposit accounts, and electronic chattel paper may be perfected by control.
methods of obtaining control of deposit account
1) bank where the non-consumer account is maintained automatically has control over the deposit account.
2) putting deposit account in secured party name
3) agreeing in authenticated record with debtor and bank that the bank will comply with secured party order regarding deposit account.
control investment property
secured party has control of an item of investment property when the secured party has taken whatever steps are necessary to be able to have the investment property sold without further action from the owner.
electronic chattel paper- control
here need to reliably establish that secured party is the assignee.
perfection for motor vehicles
titled can only be perfected by notation on the certificate of title issued by the state.
perfection for motor vehicles dealers
Security interests created by dealers in vehicles held in inventory for sale or lease are perfected by filing a financing statement.
perfection by filing
file a financing statement- debtor name and mailing address, include secured party name and a description of the collateral.
debtor name misspelled in financing statement
Minor errors in the debtor’s name won’t invalidate a financing statement, but seriously misleading errors will. A financing statement is not seriously misleading if it would be discovered in a filing office search under the debtor’s correct name, using the filing office’s standard search logic.
debtor name change
the financing statement is effective only against collateral acquired by the debtor before the name became insufficient and within 4 months after. For collateral acquired after the 4-month period, the secured party must refile using the debtor’s correct name.
description of collateral in financing statement
in a security agreement- super generic description of the collateral is okay.
after acquired property in security agreement
statement need not mention after-acquired property to perfect a security interest in such property if the description in the financing statement is broad enough to cover the after-acquired property.
where do you file?
file in secretary of state office where debtor is located, if they move then only perfected for 4 months unless you file financing statement in that jurisdiction.
perfection of proceeds
proceeds automatically perfected for 20 days after receipt of proceeds.
perfection for collateral beyond 20 days
- if proceeds are identifiable cash proceeds
- same office rule applies
- you perfect within 20 day period.
same office rule
here you are dealing with swap, need to meet 3 things.
1. interest in collateral was perfected by filing financing statement.
2. perfection of proceeds would be done by filing same places as where original collateral was perfected.
3. proceeds were not acquired by cash.
change in use of collateral
the filed financing statement remains effective to perfect the security interest.
