Quiz Flashcards
Instruments are pieces of paper that represent
the right to be paid money.
Perfection gives a secured party
greater priority as against others with competing interests in the collateral.
Filing an authorized financing statement is _____________ for a security interest to attach, but rather is one way to perfect a security interest.
not necessary
Attachment establishes
the secured party’s rights against the debtor.
A security interest cannot be perfected until
it’s attached.
In most states, and for most types of collateral, including goods, a financing statement must be filed
with the secretary of state of the state where the DEBTOR is located.
Where must a creditor file a fixture filing?
Wherever a mortgage on real property would be filed in the jurisdiction where the land is.
Often a county clerk’s office.
Fixture filings do not following the general rule in most states that the financing statements must be filed with the secretary of state of the state where the debtor is located.
A purchase money security interest (PMSI) in consumer goods is perfected as soon as:
it attaches.
A PMSI arises where the creditor
(1) sells goods to the debtor on credit and reserves a security interest in those goods, or
(2) advances the funds used to purchase goods and reserves a security interest in those goods.
Automatic perfection does not apply
to PMSI’s in other types of goods, and security interests in noninventory motor vehicles generally can be perfected only by notation on the vehicle’s certificate of title, even if that car would be categorized as a consumer good.
The original filing of a financing statement generally is effective for
5 years.
To continue the effectiveness of a financing statement, a continuation statement must be authorized by
the secured party only.
Continuation statements may be filed during
the last 6 months of the effective period of a prior filing, and will continue the effectiveness of the filing for 5 more years.
If a secured party in a nonconsumer transaction fails to comply with default rules of the UCC, what happens?
The value of the collateral is presumed to equal the amount of the debt.
In nonconsumer transactions, the rebuttable presumption rule applies, which holds
that the value of the collateral is presumed to equal the amount of the debt unless the secured party proves otherwise.
A purchase money security interest in most goods has priority over conflicting security interests in the same goods only if
the PMSI is perfected before or within 20 days after the debtor receives possession of the goods.
May a security agreement contain a clause giving the secured party rights in property the debtor will acquire in the future?
Yes, for all types of collateral other than commercial tort claims.
in general, Article 9 applies to
contractual security interests in personal property and fixtures, but not other forms of real property. Thus, it does not apply to a sale or mortgage of a single family home or a mechanic’s lien on a commercial building. But it does apply to a security interest in a car.
Equipment is defined as
goods that are not consumer goods, farm products or inventory.
Documents are
pieces of paper that represent the right to receive goods.
Instruments are
pieces of paper that represent the right to be paid money, such as a check.
Investment property includes
items such as stocks, bonds and mutual funds.
A repossession made over any protest by the debtor
constitutes a breach of the peace, even though no violence or significant disturbance occurs.
“dont take my car”
breach of the peace.
