Secured Transactions

Question 1

Article 9 of the UCC applies to

Answer 1

any transaction intended to create a security interest in personal property or fixtures. A security interest gives a creditor the right to sell a debotrs property in order to satisfy a debt.

Question 2

Personal Property or Fixtures secure the payment of…

Answer 2

1. a debt or
2. to insure performance of a contract obligation
3. with the property serving as a collateral

Question 3

who are the main parties to an Article 9 transaction

Answer 3

a secured party is the creditor who possesses the benefit of the security interest

a debtor is the party who has an ownership interest or other sufficient interest in the personal property securing the obligation.

the obligor is the party held responsible for the underlying obligation

secured party - creditor debtor - interest in collateral obligor –

Question 4

What is collateral?

Answer 4

refers to the property in which a security interest is created, and it extends to identifiable proceeds from the property that serves as collateral.
1. Goods - all things movable
2. Consumer Goods - used mainly for family or personal purposes
3. Inventory - goods kept for sale
4. Accounts - right to payment

Question 5

What is attatchment?

Answer 5

UCC 9 -203 how a security interest is created. A SI attatches to collateral when it becomes enforceable agasint the debtor with respect to the collateral, *unless an agreeemnt expressly postpones the time of attatchment. *
Requirements:
1. Value Given
2. Rights of Debtor established - right to transfer rights
3. Security Agreement - authentication of security agreement

Attatchment = Value Given, Rights Transferable, Security Agreeemnt

Question 6

How is SI perfected?

Answer 6

Once a security interest is perfected it is enforceable.
How to perfect (only need one element to perfect)
1. Filing - filing of financial statment
2. Possesion - secured party taking mere possesion of collateral
3. Automatic Perfection - i) PMSI in Consumer Goods and an ii) Assignment of Accoutns

Rember if no attatchment - then no perfection

Perfection
1. Filing financial statement
2. Possession of collateral
3. Automatic perfection through a PMSI of consumer goods or assignments of accounts.