Purchase Money Security Interests (PMSI)

Question 1

Types of Collateral that May Qualify as a PMSI

Answer 1

(1) Goods

(2) Software

Question 2

PMSI Elements

Answer 2

(1) Value given allows debtor to ACQUIRE the goods/software; and
(2) The goods/software acquired SECURE the loan

Question 3

Lender PMSI

Answer 3

Lender loans money to debtor so debtor can acquire goods

Question 4

Seller PMSI

Answer 4

Goods bought on credit

Question 5

PMSI Automatic Perfection

Answer 5

PMSIs in CONSUMER GOODS are automatically perfected

Question 6

PMSI Perfection Rules

Answer 6

Secured party must FILE A FINANCING STATEMENT OR TAKE POSSESSION

REMEMBER: PMSIs in consumer goods are automatically perfected