perfection of security interest

Question 1

methods of perfection

Answer 1

1. Filing
2. Taking Possession of the collateral
3. control
4. automatic perfection
5. temporary perfection

Question 2

time of perfection

Answer 2

security interest is not enforceable against anyone until it has attached to the collateral.

Question 3

PSMI In consumer goods

Answer 3

A PMSI in consumer goods is perfected as soon as it attaches.

Question 4

security interest in motor vehicles

Answer 4

can be perfected only by notation on the vehicle’s certificate of the title.

Question 5

perfection by taking posession

Answer 5

this is called a pledge, perfection occurs when you take actual possession of the collateral.

Question 6

which interest cannot be perfected by possession?

Answer 6

general intangibles, deposit accounts, nonnegotiable documents, electronic chattel paper, certificate of title goods, and accounts cannot be perfected by possession.

Question 7

perfection by control

Answer 7

Security interests in investment property, non consumer deposit accounts, and electronic chattel paper may be perfected by control.

Question 8

methods of obtaining control of deposit account

Answer 8

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.

Question 9

control investment property

Answer 9

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.

Question 10

electronic chattel paper- control

Answer 10

here need to reliably establish that secured party is the assignee.

Question 11

perfection for motor vehicles

Answer 11

titled can only be perfected by notation on the certificate of title issued by the state.

Question 12

perfection for motor vehicles dealers

Answer 12

Security interests created by dealers in vehicles held in inventory for sale or lease are perfected by filing a financing statement.

Question 13

perfection by filing

Answer 13

file a financing statement- debtor name and mailing address, include secured party name and a description of the collateral.

Question 14

debtor name misspelled in financing statement

Answer 14

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.

Question 15

debtor name change

Answer 15

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.

Question 16

description of collateral in financing statement

Answer 16

in a security agreement- super generic description of the collateral is okay.

Question 17

after acquired property in security agreement

Answer 17

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.

Question 18

where do you file?

Answer 18

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.

Question 19

perfection of proceeds

Answer 19

proceeds automatically perfected for 20 days after receipt of proceeds.

Question 20

perfection for collateral beyond 20 days

Answer 20

1. if proceeds are identifiable cash proceeds
2. same office rule applies
3. you perfect within 20 day period.

Question 21

same office rule

Answer 21

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.

Question 22

change in use of collateral

Answer 22

the filed financing statement remains effective to perfect the security interest.