Secured Transactions Flashcards

1
Q

Article 9 UCC

A

Applies to any transaction intended to create a security interest in personal property or fixtures

A security interest gives a creditor the right to sell a debtors property to satisfy a debt

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2
Q

Parties of Article 9

A

Secured party: is the creditor with the security interest
Debtor: party with the ownership interest in the persona obligation
Obligor: party held responsible for the underlying obligation (generally also the debtor but also could be a guarantor)

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3
Q

Collateral

A

The property in which a security interest is created

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4
Q

Types of Collateral

A

Goods: all things that are movable
Consumer Goods: goods that are used mainly for personal, family or household purposes
Inventory: goods that are kept by person for sale or lease
Accounts: security interest in debtor’s accounts

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4
Q

Attachement

A

How a security interest is created

Security interest attaches to collateral when it become enforceable against the debtor

Requirements:
1. secured party extends value to the debtor
2. the debtor has rights in the collateral or the power to transfer rights to the secured party AND
3. a UCC 9-203(b)(3) condition is met
-usually satisfied by authentication of a security agreement r when party takes possession or control

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4
Q

Authentication

A

requires debtor to authenticate the agreement by providing the secured party with a reasonable description of the collateral in writing
-then signature, thumb print etc are all enough as long as the debtor possessed the intent to authenticate the writing

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4
Q

Perfection

A

Once the security interest attaches then it is enforceable

If the security interest does NOT attach then it cannot be perfected

Methods for SI to be perfected:
1. Filing: the filing of a financing statement or the security agreement with the state
-must have the debtors name, the secured party’s name, an adequate description of the collateral AND the filing fee

  1. Taking possession
  2. automatic perfection:

-

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4
Q

Priority Rules

A

-perfected security interest has priority over a conflicting unperfected SI in same collateral

-multiple perfected creditors: first to file obtains priority
-if collateral that cannot be filed–the first to perfect

Lein creditors:
basically same status as perfected secured creditors

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5
Q
A
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