Secured Transactions

Question 1

Consumer goods

Answer 1

goods used or bought for personal, family or household purposes

Question 2

Farm products

Answer 2

crops, livestock, umanufactured products and supplies used in farm operations in possession of or used by a farmer

Question 3

Inventory

Answer 3

goods held for sale or lease and goods used in business that are consumed in short order

Question 4

Equipment

Answer 4

Goods that aren’t consumer goods, farm products ,or inventory (e.g. durable goods used in business, paintings on an office wall)

Question 5

What category is this collateral:
manure sold by debtor’s agricultural supply store

Answer 5

Inventory

Question 6

Tangible Collateral

Answer 6

All things movable at the time the security interest attaches, except money

Question 7

What are the 4 types of tangible collateral under Article 9?

Answer 7

consumer goods
equipment
inventory
farm products

Question 8

What are the 8 types of intangible property?

Answer 8

General intangible
Investment property

Accounts
Deposit accounts
Documents
Instruments
Chattel paper
Tort claims (commercial))

Question 9

Instrument

Answer 9

Paper that represents the right to be paid money

Question 10

Documents

Answer 10

papers that represent the right to receive goods

Question 11

Investment property

Answer 11

Stocks, bonds, mutual funds, brokerage accounts

Question 12

What is required for a secured interest to attach to collateral?

Answer 12

(1) Security agreement evidenced by writing or creditor’s possession of collateral
(2) Secured party gives value
(3) Debtor has rights in collateral

Question 13

When does a PMSI arise?

Answer 13

(1) when creditor sells goods to debtor on credit and retains security interest in the goods for all or part of purchase price.
(2) when creditor advances funds used by debtor to purchase collateral and the creditor takes an security interest in that collateral

Question 14

How may a security interest in equipment be perfected?

Answer 14

by filing a financing statement OR
by creditor’s possession of the collateral

Question 15

What collateral may be perfected by filing?

Answer 15

Everything except deposit accounts and money (unless either is claimed as proceeds of other collateral)

Question 16

What collateral may be perfected by control?

Answer 16

ONLY:
investment property
nonconsumer deposit accounts and
electronic chattel paper

Question 17

Where are most financing statements filed in FL?

Answer 17

Florida Secured Transaction Registry

Question 18

Where must a filing statement for a fixture be filed?

Answer 18

With the clerk of the circuit court of the county where the land sits

Question 19

In addition to usual filing requirements of financing statement, a fixture filing must….

Answer 19

Provide a description of the real property to which the fixture is attached

Question 20

Collateral may generally be described by category EXCEPT

Answer 20

(1) commercial tort claims
(2) consumer goods and
(3) consumer securities accounts

Question 21

What must secured party do when posessing collateral?

Answer 21

Use reasonable care in storing and preserving collateral

Question 22

Risk of loss is on whom when secured party possesses collateral?

Answer 22

On debtor to extent of insurance coverage deficiency

Question 23

May a secured party repledge collateral (i.e. use it as collateral for another obligation)?

Answer 23

Yes

Question 24

A secured party may hold as additional collaterall….

Answer 24

any increase in value of or profits from collateral (except money)

Question 25

What is required information in a financing statement?

Answer 25

(1) debtor's name and address (2) creditor's name and address (3) description of collateral (may be supergeneric) (4) debtor's authorization

Question 26

Conflicting security interests perfected by filing

Answer 26

Priority goes to first party to either file or perfect

Question 27

Automatic perfection

Answer 27

PMSI in consumer goods perfected as soon as it attaches

Question 28

Security interests in noninventory motor vehicles can be perfected only by

Answer 28

Notation on vehicle's certificate of title (even if consumer good)

Question 29

Security interests in nondeposit accounts can be perfected by

Answer 29

secured party taking control of account

Question 30

Who has automatic control over a nonconsumer deposit account?

Answer 30

The bank where nonconsumer deposit account is maintained

Question 31

How can a secured party (not a bank) get control over a nonconsumer deposit account?

Answer 31

(1) putting deposit account in secured party's name OR (2) agreeing in authenticated record w debtor and bank that bank will comply with secured party's orders regarding deposit account.

Question 32

can a secured interest in deposit accounts and money be perfected by filing a financing statement?

Answer 32

no (but if deposit account is claimed as proceeds of other collateral, a filed security interest in original collateral automatically perfects a security interest in the proceeds)

Question 33

If a deposit account is claimed as the proceeds of other collateral...

Answer 33

a filed security interest in the original collateral automatically perfects a security interest in the proceeds.

Question 34

What security interests may be perfected by possession?

Answer 34

security interests in tangible collateral, such as equipment

Question 35

A filing of a financing statement is effective for...

Answer 35

5 years from the date of filing

Question 36

continuation statements may be filed..

Answer 36

within the last 6 months of the effective period.

Question 37

whose authorization is necessary for a continuation statement?

Answer 37

secured party's only

Question 38

if a secured party violates article 9's default rules...

Answer 38

the value of the collateral is presumed equal to the amount of debt unless proven otherwise

Question 39

A PMSI in goods other than inventory or livestock has priority over conflicting interest in the same goods and proceeds only if...

Answer 39

the interest is perfected before or within 20 days after the debtor receives possession of the goods

Question 40

What may a secured party do if the debtor defaults on security agreement?

Answer 40

(1) use self help w/o judicial process if she can do so w/o breach of peace (2) may sell, lease, license collateral by public sale, private sale, or contract (3) may keep collateral to satisfy debt or (4) may bring ordinary judicial action for amounts due and levy on collateral

Question 41

Proceeds

Answer 41

whatever is received upon the sale, lease, exchange, license, collection or other disposition of collateral or proceeds.

Question 42

Future advances

Answer 42

funds secured party has agreed to loan debtor in future

Question 43

What is the effect if a security agreement contains a future advance clause?

Answer 43

No new security agreement is needed when future loan is made

Question 44

After acquired property clauses are ineffective as to

Answer 44

commercial tort claims

Question 45

After acquired property clauses are effective for consumer goods only if

Answer 45

debtor acquires rights in goods within 10 days after creditor gives value