Secured Transactions Flashcards
Debtor
person who owes payment or performance
Secured transaction
transaction intended to create a security interest in personal property or fixtures
Secured Party
also called creditor
lender, seller, or other person in whose favor there is a security interest
Security agreement
agreement between debtor and secured party that creates the security interest
Security interest
interest in personal property or fixtures that secures payment or performance of an obligation
Collateral
property subject to a security interest
Purchase money security interest
A secured party sells the goods to the debtor on credit and retains an SI in the goods sold
A creditor loans the funds to debtor to enable to debtor to buy specific collateral and those funds are used to by the collateral
Goods
all movable things
consumer goods
- goods used or bought primarily for household, personal, or family purposes
equipment
- goods bought or used in business
- catchall
farm products
- crops or livestock or supplies used or produced in farming operations
- products of crops or livestock in their unmanufactured states if they are in possession of a debtor engaged in farming operations
inventory
- goods held for sale or lease or goods used or consumed in a business in a short period of time
Intangible collateral
Instruments
- paper representing right to be paid money
documents
- doc that represents right to receive goods
chattel paper
- monetary obligation plus security interest
investment property
- stocks, bonds, mutual funds
accounts
- right to payment for property sold or services rendered - account receivable
deposit accounts
- nonconsumer account with bank
commercial tort claims
- business claim for damages
general intangibles
- any other personal property
payment intangible
- general intangible that is a monetary obligation
Attachment
SI not enforceable until attached - rights against debtor
- security agreement - contract, possession, or control
- value given by SP
- Debtor has rights in the collateral
Security agreemetn
Signed by debtor
Description of collateral
- reasonably identify
- no supergeneric
After acquired property clause exception
Attaches automatically to accounts and inventory
- rapidly depleted and replenished collateral
automatically attaches to identifiable proceeds
does not apply to consumer goods unless acquired within 10 days of giving value
does not apply to any commercial tort claims
Proceeds
whatever is received upon sale, exchange, collection, or other disposition of collateral or proceeds
commingled proceeds
lowest intermediate balance rule
lowest balance during the time period is SP’s identifiable proceeds - but cannot exceed value of original deposit
Perfection
rights against third parties
- cannot be perfected until attached
5 methods
- filing
- possession
- control
- automatic
- temporary
Automative perfection
PMSI in consumer goods
unless it is covered by a certificate of title statute - then can only be perfected by certificate of title
fixtures - only if file fixture filing
Perfection by possession
Money can only be perfected by possession