Secured Transactions

Question 1

What are the 4 types of goods under tangible collateral?

Answer 1

Goods = anything that is moveable at the time the security interest attaches

(1) consumer goods: goods acquired primarily for personal, family or household purposes

(2) farm products: goods that are crops or livestock or products of crops or livestock and supplies used or produced in farming

(3) inventory: goods, other than farm products, held for sale or lease

(4) equipment: catch-all for tangible items that do not fit in above 3 categories

Question 2

What are the 6 common types of intangible goods?

Answer 2

(1) instruments: writings representing right to be paid money

(2) documents: writings representing right to receive goods

(3) chattel paper: recording evidencing both obligation to pay and security interest in goods or lease of goods

(4) accounts: right to payment not evidenced by instrument or chattel

(5) deposit accounts

(6) general intangibles: patent rights, software, etc.

Question 3

What are the 3 requirements for a security interest to attach?

Answer 3

For a secured party to have a valid interest in collateral, it must first attach

(1) value given by the secured party
(2) debtor has rights in the collateral
AND
(3) debtor has authenticated security agreement that describes the collateral or the secured party has possession or control of the collateral

Question 4

What are the 6 methods of perfection?

Answer 4

(1) filing financial statement

(2) possession of collateral

(3) control over collateral

(4) alternate perfection systems

(5) perfection under state’s certificate of title law

(6) automatic perfection