Purchase Money Security Interest

Question 1

What is a PMSI?

Answer 1

A security interest in goods where the debtor borrowed money to purchase the specific collateral

Question 2

What are the two requirements for a PMSI?

Answer 2

the security interest must be

(1) in goods given as collateral for an obligation the debtor incurred for the purchase of the goods; AND
(2) actually used to purchase the goods