Secured transactions

Question 1

Attachment

Answer 1

Making a security interest enforceable

Security interest is enforceable if it has attached to the collateral

Question 2

Process for Attachment (VRC)

Answer 2

Value

Rights

Contract

Question 3

Value

Answer 3

Creditor must give value (loan)

Question 4

Rights

Answer 4

Debtor must have rights in the collateral

Question 5

Rights

Answer 5

Debtor must have rights in the collateral

Question 6

Contract

Answer 6

Transaction must be recorded in the security agreement

Debtor must have authenticated a security agreement that describes the collateral of the secured party has POSSESSION and CONTROL of the collateral pursuant to a security agreement

Question 7

Perfection

Answer 7

Protecting secured party from competing creditors

Question 8

Process of Perfecting

Answer 8

1) possession of collateral

2) automatic perfection of PMSI in consumer goods

3) filing UCC-1 filing statement w SCC

Question 9

Creditor’s security interest applies to

Answer 9

The collateral the debtor owns at the time the security is granted and also to collateral that the debtor acquired in the future

Question 10

If original security agreement states that it applies to after acquired collateral then…

Answer 10

No new security agreement is necessary when the collateral is acquired later

Question 11

Equipment

Answer 11

Goods that are not consumer goods, farm products, or inventory

Question 12

Priority of Creditors

Answer 12

Payment made in order of claims

Question 13

Two or more perfected secured parties with same rights to collateral

Answer 13

First to file or perfect has authority

Question 14

Purchase money security interest exists w these 2 types of collateral

Answer 14

Loan given to debtor to enable debtor to acquire Rights in or use of foods and value given was so used; and

ii. Secured party sold goods to debtor and debtor incurs an obligation to pay the security party all or part of the purchase price

(Sale of goods on credit )

Question 15

PMSI in goods other than inventory or livestock prevails over all other security interests in the collateral even if previously perfected IF

Answer 15

Secured party perfects before or within 20 days after the debtor receives possession of the collateral

Knowledge by the purchase money secured party of the conflicting prior security interest does not prevent the priority of the PMSI over the earlier perfected security interest

Question 16

Security interest in a deposit account can only be perfected by

Answer 16

Control

Question 17

Secured party has control of a deposit account if

Answer 17

1) secured party is the ban w which the deposit account is maintained

2) the bank, secured party and debtor agreed in writing to follow instructions of secured party or

3) secured party becomes the bank’s customer w respect to the depsoit account