Secured Transactions

Question 1

Any _________ or ________ of title in goods is limited in effect to the reservation of a security interest.

Answer 1

Retention or reservation

Question 2

Any retention or reservation of title in _______ is limited in effect to the __________ of a _________ ____________.

Answer 2

Goods
Reservation of a security interest

Question 3

____________ are personal property items (stuff) that becomes affixed to real property (land).

Answer 3

Fixtures

Question 4

_________ are an advanced concept in Secured Transactions courses.

Answer 4

Fixtures

Question 5

_________ 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 _________.

Answer 5

Creditors
Collateral

Question 6

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 ________ ____________.

Answer 6

Fully collateralized

Question 7

__________ ___________ 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.

Answer 7

Fully Collateralized

Question 8

Fully collateralized means what?

Answer 8

The amount owed is met or exceeded by the amount of the collateral.

Question 9

___________ ____________ means the amount owed is met or exceeded by the amount of the collateral.

Answer 9

Fully Collateralized

Question 10

___________ __________ is more about what happens when there are multiple creditors who have rights in the same collateral.

Answer 10

Secured Transactions

Question 11

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 _____________.

Answer 11

Encumbered

Question 12

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.

Answer 12

10,000
5,000

Question 13

There are often ________ __________ between multiple creditors against the same debtor for the same collateral.

Answer 13

Priority battles

Question 14

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.

Answer 14

Article 9

Question 15

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.

Answer 15

Security interest

Question 16

A ___________ __________ is a consensual lien in personal property.

Answer 16

Security interest

Question 17

A security interest is a _________ _________ in personal property.

Answer 17

Consensual lien

Question 18

What is the document in which you are going to be granting them the security interest?

Answer 18

Security agreement

Question 19

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.

Answer 19

Security agreement

Question 20

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).

Answer 20

Super generic
Super generic

Question 21

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?

Answer 21

True

Question 22

For a security agreement, you have to be at least as specific as an ____________ classification category.

Answer 22

Article 9

Question 23

For a security agreement, you have to be at least as specific as an article 9 classification category. Examples:
1.
2.
3.
4.

Answer 23

1. Equiptmemt
2. Inventory
3. Farm Products
4. Consumer Goods

Question 24

Equiptmemt

Answer 24

Article 9 Classification Category for a Security Agreement

Question 25

Inventory

Answer 25

Article 9 Classification Category for a Security Agreement

Question 26

Farm Products

Answer 26

Article 9 Classification Category for a Security Agreement

Question 27

Consumer Goods

Answer 27

Article 9 Classification Category for a Security Agreement

Question 28

Examples:
Equiptmemt
Inventory
Farm Products
Consumer Goods
Those are all ___________ collateral classification categories that is specific enough for a security agreement.

Answer 28

Article 9