Secured Transaction Flashcards
attachment definition
gives the creditor rights against the debtor in the collateral
Attachment requirements
(1) parties agree t ocreate security agreement, (2) the creditor must give value, and (3) debtor must have rights in the collateral
Perfection
how a creditor obtains rights against another claimants to a debtor’s collateral.
Protects against third parties
Perfection requirements
(1) filing in the proper public office a financing statement that is authorized by the debtor in an authenticated record
(2) taking possession (not allowed in intangibles, nonconsumer deposit accounts, nonnegotiable documents, electronic chattel paper, certificate of title goods, and accounts)
(3) perfection by control (investment property, nonconsumer deposit accounts, electronic chattel paper
(4) automatic perfection- PMSI in consumer goods
(5) temporary perfectsion- 20 days from debtor’s receipt of the proceeds
Purchase money security interest-
created when a creditor advances credit or provides the funds needed to make a purchase possible and takes a security interest in the goods purchased
consumer goods
goods bought or used for personal, family, or household purposes
inventory
goods held for sale or lease and goods consumed by a business
farm products
goods used or produced in farming that are in the possession of or used by a farmer;
equipment-
goods that are not consumer goods, inventory, or farm products
priority Between 2 unperfected secured parties
priority to the first one to attach
priority unperfected v. perfected
perfected security interest generally prevails over an unperfected security interest
priority between perfected secured parties
the first party to file or perfect - whichever occurred first- has priority
Perfecting Vehicles
a financing statement is not effective to perfect a security interest in vehicles subject to a state statute that provides for perfection by notation on the certificate of title
accessions
general rules for priority apply
UNLESS: security interest in the whole perfected under an applicable certificate of title statute has priority over the security interest in the accession
fixtures
the first party to file a fixture filing or record its real property interest prevails
UNLESS: PMSI security party who makes a fixture filing within 20 days after affixation will prevail over any real property interest in the same fixture that was recorded prior to affixation
fixtures definition
goods that become so attached to real property that an interest in them arises under real property law
accessions
goods that are physcially united with other goods in such a manner that the identity of the original goods is not lost
PSMI in equipment
has priority over conflicting security interests if the PMSI is perfected when the debtor receives possession of the equipment (or within 30 days thereafter)
PMSI in goods other than inventory or livestock
priority over a ocnflictin security interest in the same goods or identifiable proceedings if purchase money interest is perfected at time debtor received possession of collateral or within 20 days thereafter
conflicting purchase money security interest
seller-financed purchase money security interest has priority over a financer financed purchase money security interest
security interests in all collateral are perfected by filing financial statements UNLESS
nonconsumer deposit accounts and money= perfected by control
financing statement requirements
(1. debtors name and address
2. secured parties name and address
3. indicating of collateral
when is a financing statement insufficient
debtors trade name or doesn’t use name on debtors public record
Name not seriously misleading
if financing statement would still be discovered in search of debtors correct name using filing offices standard search logic
