Secured Transaction

Question 1

attachment definition

Answer 1

gives the creditor rights against the debtor in the collateral

Question 2

Attachment requirements

Answer 2

(1) parties agree t ocreate security agreement, (2) the creditor must give value, and (3) debtor must have rights in the collateral

Question 3

Perfection

Answer 3

how a creditor obtains rights against another claimants to a debtor’s collateral.

Protects against third parties

Question 4

Perfection requirements

Answer 4

(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

Question 5

Purchase money security interest-

Answer 5

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

Question 6

consumer goods

Answer 6

goods bought or used for personal, family, or household purposes

Question 7

inventory

Answer 7

goods held for sale or lease and goods consumed by a business

Question 8

farm products

Answer 8

goods used or produced in farming that are in the possession of or used by a farmer;

Question 9

equipment-

Answer 9

goods that are not consumer goods, inventory, or farm products

Question 10

priority Between 2 unperfected secured parties

Answer 10

priority to the first one to attach

Question 11

priority unperfected v. perfected

Answer 11

perfected security interest generally prevails over an unperfected security interest

Question 12

priority between perfected secured parties

Answer 12

the first party to file or perfect - whichever occurred first- has priority

Question 13

Perfecting Vehicles

Answer 13

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

Question 14

accessions

Answer 14

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

Question 15

fixtures

Answer 15

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

Question 16

fixtures definition

Answer 16

goods that become so attached to real property that an interest in them arises under real property law

Question 17

accessions

Answer 17

goods that are physcially united with other goods in such a manner that the identity of the original goods is not lost

Question 18

PSMI in equipment

Answer 18

has priority over conflicting security interests if the PMSI is perfected when the debtor receives possession of the equipment (or within 30 days thereafter)

Question 19

PMSI in goods other than inventory or livestock

Answer 19

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

Question 20

conflicting purchase money security interest

Answer 20

seller-financed purchase money security interest has priority over a financer financed purchase money security interest

Question 21

security interests in all collateral are perfected by filing financial statements UNLESS

Answer 21

nonconsumer deposit accounts and money= perfected by control

Question 22

financing statement requirements

Answer 22

(1. debtors name and address
2. secured parties name and address
3. indicating of collateral

Question 23

when is a financing statement insufficient

Answer 23

debtors trade name or doesn’t use name on debtors public record

Question 24

Name not seriously misleading

Answer 24

if financing statement would still be discovered in search of debtors correct name using filing offices standard search logic

Question 25

perfected security interest v. judicial lien

Answer 25

prior perfected security interest trumps judicial lien