R7 Secured Trans 2 (S)

Question 0

Priority Rankings of Conflicting Interest in Collateral

Answer 0

1. Consumer in the ordinary course of business
2. Perfected PMSI
3. Perfected
4. Unperfected and attached
5. Debtor

Question 1

Temporary Perfection

Answer 1

Twenty day period for proceeds

Movement of debtor - 4 month grace period

Question 2

Buyers in the Ordinary Course of Business

Answer 2

Buys goods from a merchant’s inventory

Buyer takes free of a perfected security interest in the inventory even if he knows of the security interest

Question 3

Properly Perfected PMSI

Answer 3

Almost always wins

If a buyer of consumer goods resels the goods to another consumer buyer, the secondhand buyer wil take free of an automaticaly perfected PMSI in consumer goods as long as the secondhand consumer had no notice of the security interest (garage sale)

Do not have to filed but should

Question 4

PMSI in Inventory

Answer 4

A PMSI in invetory has priority over a prior perfected security interest in the same inventory colateral if the PMSI is perfected when the debtor gets possession of the colateral and any secured party who has filed a security interest in the same colateral is given notice of the PMSI before the debtor receives the inventory

Question 5

Non-Inventory PMSI

Answer 5

If perfected within the 20-day grace period, perfection relates back to the day the debtor got possession (which means PMSI is superior to security interest created in the 20-day grace period)

Question 6

Perfected Security Interests

Answer 6

First to file or perfect wins

If the security interest was perfected before the judicial security lien was attached, it has priority

Bankruptcy trustee is subordinate to al prior perfected security interests

Question 7

Unperfected Security Interests

Answer 7

If there are two unperfected security interests in the same colateral, the first to attach has priority

Question 8

Rights on Default

Answer 8

Right to take possession of and sell colateral

Retention of colateral in satisfaction of debt

Debtor’s right of redemption

Judicial Action against Debtor

Question 9

Right to Take Possession of Colateral

Answer 9

The secured party may take possession by self-help without judicial process if she can do so without a breach of the peace

The secured party may always take possession of the colateral by replevy

Question 10

Right to Sell Collateral

Answer 10

After default and repossession, the secured party may sel or lease the colateral by either public or private sale. Debtor can redeem before sale

Must be commercialy reasonable

Debtor and other parties must be given notice of the sale

Sale wipes out all subordinate interests but is subject to superior interests

Question 11

Proceeds of Default Sale

Answer 11

1. Pay the expenses of the sale
2. Pay creditors with a security interest in order of priority
3. Any surplus is paid to the debtor

Question 12

Compulsory Disposition of Consumer Goods

Answer 12

In consumer goods cases where the debtor has paid at least 60% of the loan, the secured party must sell the colateral within 90 days after repossession