Secured Transactions Flashcards
Any _________ or ________ of title in goods is limited in effect to the reservation of a security interest.
Retention or reservation
Any retention or reservation of title in _______ is limited in effect to the __________ of a _________ ____________.
Goods
Reservation of a security interest
____________ are personal property items (stuff) that becomes affixed to real property (land).
Fixtures
_________ are an advanced concept in Secured Transactions courses.
Fixtures
_________ will loan you money or extend credit to you but they want to get paid back. Giving you money or extending you credit is a risk to them so often a bank will say, you want a loan from me and you have a job and decent credit but what can you give me to make sure you are going to pay on time and pay in full. That thing the bank gets to take is called _________.
Creditors
Collateral
Example: Diamond Necklace is worth 15,000.
You want to start a small business that is 10,000.
The bank will say perfect because they want to be ________ ____________.
Fully collateralized
__________ ___________ means that the amount that I owe is met or exceeded by the amount of the collateral so if you default and stop paying and they take the necklace they will be paid in full.
Fully Collateralized
Fully collateralized means what?
The amount owed is met or exceeded by the amount of the collateral.
___________ ____________ means the amount owed is met or exceeded by the amount of the collateral.
Fully Collateralized
___________ __________ is more about what happens when there are multiple creditors who have rights in the same collateral.
Secured Transactions
Example: I spend 10,000 and started my business and then I decide that I need more money and then I go to bank 2 and ask for 5,000. Bank 2 will ask what you have as collateral and I say I have this diamond ring (15,000), they are going to do a search to see if any assets are _____________.
Encumbered
Example: I spend 10,000 and started my business and then I decide that I need more money and then I go to bank 2 and ask for 5,000. Bank 2 will ask what you have as collateral and I say I have this diamond ring (15,000), they are going to do a search to see if any assets are encumbered. They will find that you are encumbered up to ________ so there is _________ so we are good.
10,000
5,000
There are often ________ __________ between multiple creditors against the same debtor for the same collateral.
Priority battles
There are often priority battles between multiple creditors against the same debtor for the same collateral. The creditors are going to want to follow all of the rules to make sure that they can get paid back first. The rules are in ____________________ of the UCC.
Article 9
In order for a creditor to be able to take your collateral if you don’t pay you have to give them a _________ ___________ in the collateral.
Security interest
A ___________ __________ is a consensual lien in personal property.
Security interest
A security interest is a _________ _________ in personal property.
Consensual lien
What is the document in which you are going to be granting them the security interest?
Security agreement
The ________ ___________ is the contract between the debtor and the creditor and it is private. It doesn’t typically get recorded anywhere for the public to see.
Security agreement
It is important in the security agreement contract for the debtor to know exactly what collateral the creditor is going to take if they default. You cannot be _______ __________ in a security agreement. (_________ _______= term of art).
Super generic
Super generic
You cannot be super generic in a security agreement. Do NOT say all assets and Do NOT say all personal property. Those are not specific enough phrases to tell anybody. It makes it sound like the clothes off your back and that is not realistic. True or False?
True
For a security agreement, you have to be at least as specific as an ____________ classification category.
Article 9
For a security agreement, you have to be at least as specific as an article 9 classification category. Examples:
1.
2.
3.
4.
- Equiptmemt
- Inventory
- Farm Products
- Consumer Goods
Equiptmemt
Article 9 Classification Category for a Security Agreement
Inventory
Article 9 Classification Category for a Security Agreement
Farm Products
Article 9 Classification Category for a Security Agreement
Consumer Goods
Article 9 Classification Category for a Security Agreement
Examples:
Equiptmemt
Inventory
Farm Products
Consumer Goods
Those are all ___________ collateral classification categories that is specific enough for a security agreement.
Article 9
