Secured Transaction Issues And Rule Statements

Question 1

Has a security interest properly attached? Call of question phrasing: discuss whether the requirements for attachment of security interest have been satisfied.

Answer 1

A security interest is attached when PIG: 1.) Debtor has rights in the collateral, 2.) Interest created (i.e, writing signed by debtor that reasonably describes collateral — no generic descriptions), 3.) Given Value

Question 2

Issue: whether the collateral is adequately described in the security agreement?

Answer 2

The description of the collateral must reasonably identify what is covered in the agreement.

Question 3

Whether the security agreement is perfected?

Answer 3

A security agreement is perfected when it has attached and all applicable perfection steps (filing a financing statement, possession, control, or automatic perfection.) have been completed.

Question 4

Whether an unperfected security interest can still have priority over other creditors.

Answer 4

I’m general, an unperturbed security interest is subordinate to a perfected one, unless a special rule applies (e.g., a PMSI in CONSUMER GOODS).

Question 5

Whether a secured party can repossess the collateral upon debtors default?

Answer 5

A secured party can take possession of the collateral without judicial process, provided it cash be done without breach of the peace.

Question 6

Whether the secured party has disposed of the the collateral in a commercially reasonable manner.

Answer 6

Following repossession, the secured party must dispose of the collateral in a commercially reasonable manner.

Question 7

Whether a secured party can seek a deficiency judgement after deposition of the collateral.

Answer 7

If proceeds from disposition of the collateral are not sufficient to satisfy the debt, the secured party can seek a deficiency judgment for the remainder.

Question 8

Whether a debtor can use cash-collateral without the secured party’s consent.

Answer 8

A debtor may use cash collateral if the secured party consents or if the court authorizes such use.

Question 9

Whether a secured party needs to make a fixture filing to perfect a security interest in fixtures.

Answer 9

To perfect a security interest in fixtures, the secured party generally needs to make a fixture filing.

Question 10

When a debtor defaults under a security agreement, does the secured creditor have the right to disable equipment that is part of the collateral?

Answer 10

Yes. Because PRT defaulted under its security agreement with Ion, Ion id entitled to take possession of the equipment that is collateral for that obligation or leave the equipment at PTT’s premises and