Secured Credit & Bankruptcy Flashcards
The filing statement must include:
the name and mailing address of the debtor, the name and mailing address of the secured party, and an indication of the collateral covered by the financing statement.
Attachment
Creditor gave value; contract/security agreement; debtor has rights in the collateral
Description of collateral in security agreement
category, type, or any other method in which the identity of the collateral is objectively determinable. However, a supergeneric description of collateral, such as “all the debtor’s assets,” is not sufficient.
A debtor has the ability to cure a default and regain the collateral if certain requirements are met:
(i) the debtor still has the collateral, (ii) the debtor tenders the unpaid balance on the collateral, and (iii) the debtor tenders all of the creditor’s reasonable expenses and attorneys’ fees.
Requirements for strict foreclosure
1) DEBTOR CONSENTS (or fails to object within 20 days of when creditor sent notice); 2) creditor sends authenticated NOTICE to (i) debtor and (ii), if the collateral is not consumer goods, to creditors who have perfected by filing or notation on certificate of tile and creditors who have given notice to the creditor; 3) NO TIMELY OBJECTION (if debtor or another creditor objects in writing within 20 days, that works).
PMSI exception for lien creditors/bankruptcy trustees
If a PMSI creditor perfects by filing within 20 days after the debtor receives possession, the creditor will defeat lien creditors who obtained their liens in the gap period.
PMSI not a preference if:
it secures new value that was given by the secured party at or after the signing of a security agreement if it is perfected within 30 days of the debtor receiving possession of the collateral.
Preference
a transfer of a debtor’s interest in property for or on account of an antecedent debt made or suffered by the debtor while insolvent and within 90 days (one year in the case of an insider) before the filing of a petition in bankruptcy, the effect of which enables a creditor to obtain a greater percentage of his debt than he would have received otherwise in a liquidation case.
Debtor files these docs, among others, for ch. 7 bankruptcy
list of creditors, schedule of assets and liabilities, schedule of current income and current expenditures
Automatic stay
Collection activities violate the stay, including perfection. But you can maintain the perfection without violating the stay.
Trustee’s power over fraudulent transfers
Trustee can avoid any transfer that would be voidable under non-bankruptcy law by an actual unsecured creditor. Under the federal fraudulent transfer rules, the transfer must take place within 2 years to be voidable, but the trustee can also look to state law (4 yrs).
Types of fraudulent transfers:
1) fraudulent intent; 2) transfers for less than reasonably equivalent value if: insolvent, was/about to engage in business w/ unreasonably small amount of capital, intent to incur debts beyond ability to pay, for benefit of an insider (or obligation for insider under employment K not in ordinary course of business)
