Quiz Flashcards
Where must a financing statement be filed?
Generally, the financing statement must be filed with the Secretary of State (“central filing”) of the state of the debtor’s location.
A security interest in a ________ _________ can be perfected only by control.
deposit account
A PMSI in what type of goods automatically perfects upon attachment?
A PMSI in consumer goods automatically perfects upon attachment.
(A PMSI in other types of goods (e.g., inventory, equipment) or automobiles does not automatically perfect.)
Once there has been a default, the secured party can repossess the collateral in what two ways?
(1) By use of judicial process (e.g., replevin action); or
(2) Self-help repossession
A consumer buyer is a person who:
i) Buys consumer goods for _______;
ii) For his own ___________, family, or household use;
iii) From a __________ seller; and
iv) ______ knowledge of the security interest.
i) Value
ii) Personal
iii) Consumer
iv) Without
A consumer buyer of consumer goods takes free of a security interest, even if perfected, unless prior to the purchase, the secured party……did what?
filed a financing statement covering the goods.
Cash proceeds of a disposition are distributed in the following order:
(1) Pay reasonable expenses for collection and enforcement (e.g., reasonable __________ fees); then
(2) Pay off the debt to the __________ _______ party; then
(3) Pay ¬¬__________ security interests, provided the __________ party makes a formal ______; then
(4) Any surplus or remainder will go to the ____________
(1) attorney’s
(2) foreclosing secured
(3) subordinate, subordinated, demand
(4) debtor
A PMSI may exist only with respect to two types of collateral. What are they?
A security interest qualifies as a PMSI only if the collateral is goods (including fixtures) or software.
Proceeds are whatever results when collateral is sold, leased, ___________, __________ or otherwise disposed of.
Licensed
exchanged
Give 5 examples of non-moveable goods
(1) Fixtures
(2) Standing timber
(3) Unborn animals
(4) Growing or unharvested crops (including crops grown on trees, vines, or bushes)
(5) Manufactured homes
For a security interest to be enforceable against a debtor (i.e., attachment), what three conditions must be met?
(1) ______ has been given by the secured party;
(2) The _______ has ______ in the collateral; and
(3) The debtor has _________ a security agreement describing the collateral, or the secured party has ________ OR _______ of the collateral.
(1) value
(2) debtor, rights
(3) authenticated, possession or control
A buyer in the ordinary course of business (BOCB) is a person who:
(1) buys _____ (not _____ _________ in the ordinary course of business;
(2) from a ________ who is in the business of selling goods of that kind;
(3) in _____ ______; and
(4) without ______ _______ that the sale violates the rights of another in the same goods.
(1) Goods
Farm products
(2) merchant
(3) good faith
Accessions are goods that are physically united with other goods so that…. What? (e.g., a framed piece of art).
The security interest in the accession continues in the accession.
the identity of the original goods is not lost
Commingled goods are goods that are physically united with other goods to the point that…. What? (e.g., eggs being used to make a cake).
The security interest in the good does not continue, but it will attach to the ________ __________.
Their identity is lost
Larger product
A financing statement must contain the following information:
i) The debtor’s _____;
ii) The name of the secured party or a ____________of the secured party; and
iii) The __________ covered by the________ __________.
i) Name
ii) Representative
iii) Collateral, financing statement
A security interest in ________ can be perfected only by possession.
money
Perfection is generally necessary for the secured party to have…what type of rights?
rights in the collateral that are superior to any rights claimed by third parties.
A secured transaction is any transaction in which _______ ________or ________ secures payment or __________ of an__________.
Personal property
Fixtures
Performance
obligation
Inventory includes ______, other than _____ _________, that are held for _______ or _______.
Goods
Farm products
Sale
lease
A buyer of collateral subject to a perfected security interest generally takes the collateral….how?
Subject to the interest
Attachment requires that:
(i) _____ has been given by the secured party (ii) the ______ has rights in the collateral, and (iii) the debtor has authenticated a security agreement that describes the collateral pursuant to a ________ ___________.
Value
Debtor
Security agreement
True or False?
If a security agreement says “all assets of the borrower,” that’s going to be too general/vague.
True.
_________ of a security interest is generally necessary for the secured party to have rights in the collateral that are _________ to any rights claimed by ______ _________.
Perfection
superior
Third parties
A security interest in goods can be perfected by filing…what?
A financing statement
