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UCC art 9 Secured Transactions > Repossession Rights > Flashcards

Repossession Rights Flashcards

1
Q

Secured Trans - Repossession rights - Gral / concept, trespass rule, against whom, exception

A
  • Secured creditor with replevin right to repossess collateral
  • w/limited defense against tort of trespass (self-help authorized if reasonable and no breach of peace)
  • Against debtor: w or w/out judicial process
  • Against 3rd party: when SI perfected
  • Ojo con bankruptcy exception
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2
Q

Secured Trans - Repossession rights - Creditor’s options after reposession (2)

A

1) Strict foreclose
2) Disposition sale

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3
Q

Secured Trans - Repossession rights - Strict Foreclose / creditor’s rigths + duties (3)

A

1) Retains collateral
2) Waives deficiency judgment vs debtor
3) Provide notice of intention to foreclose to debtor AND other creditor with SI

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4
Q

Secured Trans - Repossession rights - Notice and objection

A
  • Debtor/junior creditor have 20 days to object from reception of notice of foreclosure.
  • If proper objection: secured party must hold disposition sale
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5
Q

Secured Trans - Repossession rights - Strict Foreclose - Bankruptcy Exception

A
  • Once bankruptcy petition filed, Court issues a “stay”
  • Creditor must file motion seeking relief before repossessing or disposition sale
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6
Q

Secured Trans - Repossession rights - Disposition sale - Gral / grounds (2), creditors rights (2)

A
  • Either by 1) creditor choice or 2) bc of objection to strict foreclose
  • 1) Creditor conduct non-judicial sale AND 2) retains right for deficiency judgment against debtor
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7
Q

Secured Trans - Repossession rights - Disposition sale - UCC Procedure (4 elements)

A

1) Notification
2) Sale
3) Warrant by creditor
4) Proceed’s application (priority)

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8
Q

Secured Trans - Repossession rights - Disposition sale - UCC Procedure - Notification / by, to, how, when

A
  • By: Liquidating secured creditor
  • To: debtor and other perfected parties
  • How: By authenticated notice stating time + place
  • When: At least 10 days prior to sale
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9
Q

Secured Trans - Repossession rights - Disposition sale - UCC Procedure - Sale / type, special scrutiny situations, grace period

A
  • public or private
  • Special scrutiny when to related or affiliate to creditor or for low price
  • Possible redemption
  • 90-day period grace from repossession before sale: if debtor has paid 60% of debt(price) of consumer goods - lost if default
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10
Q

Secured Trans - Repossession rights - Disposition sale - UCC Procedure - Sale - Possible Redemption (2 conditions)

A

1) Before sale
2) Payment of full balance + repossession expenses

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11
Q

Secured Trans - Repossession rights - Disposition sale - UCC Procedure - Sale - Standard of duty / standard, burden of proof, sanction

A
  • manner/method/time/place/amount need to be commercially reasonable by industry standard
  • Non waiveable
  • Burden: on Creditor conducting sale
  • Failure: dx -up to 10% of debt if for consumer goods
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12
Q

Secured Trans - Repossession rights - Disposition sale - UCC Procedure - Sale - Warrants to purchaser / what (3) and by whom

A
  • By liquidating creditor to purchaser
  • Warrant of 1) title, 2) possession and 3) quiet enjoyment UNLESS expressly established in sale doc and not against senior secured interests

AND

If there is senior creditor with SI (“purchaser acquired free and clear except from senior interests”)

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13
Q

Secured Trans - Repossession rights - Disposition sale - UCC Procedure - Sale - Proceeds application order (3)

A

1st: cover repossession + disposition sale expenses
2nd: to indebtedness to liquidating creditor
3rd: to other secured creditors (senior/junior)

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14
Q

Secured Trans - Repossession rights - Disposition sale - UCC Procedure - Sale - Proceeds application for secured creditors other than liquidating creditor (2)

A

1) Senior/Superior Interest: perfected prior to liquidation. Dont receive any proceeds, but interest survives as property lien - purchaser acquires free and clear except for senior interests
2) Junior/Subordinate: receives only amounts over the amount due to liquidating creditor, then their interest is discharged

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15
Q

Secured Trans - Repossession rights - Disposition sale - UCC Procedure - Sale - Information duty

A
  • Liquidating creditor to present debtor w/detailed record of surplus/deficiency calculation
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16
Q

Secured Trans - Repossession rights - Disposition sale - Unauthorized Sale by Debtor Consequences (2)

A

If unauthorized sale/removal/concealment/conversion of collateral by debtor + w/knowledge of existence of SI:

1) possible misdemeanor
2) possible personal cause of action from creditor or bankrupt trustee

UCC art 9 Secured Transactions (5 decks)

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