Secured Transactions Flashcards
How do you create a security interest?
The secured party must (1) give value; (2) the debtor must have sufficient rights in the collateral (no thief); and the secured party must (3) either possess the collateral pursuant to agreement or the debtor must have an authenticated security agreement.
The promise to make a loan = value
What are the six methods of perfecting an attached security interest?
- Filing a financing statement (most common)
- Possession
- Control
- Alternative perfection systems (based on statute for certain property)
- Perfection under a state’s certificate of title law
- Automatic perfection
How does one perfect by filing? What info. Is required in the financing statement? One exception?
File financing statement in the central filing office, often the secretary of state’s office in the state where the debtor is located. This is the default means of perfection for tangible property not perfected outside Article 9, like motor vehicles.
The statement must contain: (1) the name of the debtor, (2) the name of the secured party, (3) description of the collateral.
The one exception is real-real property-related collateral (includes fixtures and extracted collateral like oil or timber)
What are the extra requirements for filing a financing statement for real-property-related collateral?
must file I the local real property record in the county where the property is located. Additional requirements for the financing statement include: (1) an indication that a security agreement covers this type of collateral, (2) note that it is to be filed I the local real property records, (3) describe the real property to which the collateral related, (4) name the record owner of the real property if the debtor is not the person who has an interest I the real property.