Secured Transactions

Question 1

A security interest that has attached to specific collateral generally may be enforced against a debtor upon

Answer 1

default of debtor

Question 2

Attachment definition: a security interest is enforceable if

Answer 2

it has attached to collateral

Question 3

Requisites for Security Interest to attach to collateral

Answer 3

1) given VALUE,

2debtor has RIGHTS in collateral,

3) debtor has AUTHENTICATED a security agreement that describes the collateral

OR secured party has POSSESSION of collateral pursuant to security agreement

Question 4

Security agreement must be ___ before it can be enforced

Answer 4

authenticated by party against whom it may be enforced (debtor)

Question 5

Perfection definition:

Answer 5

Perfection protects a secured party from competing creditors

Question 6

Proocess of perfecting

Answer 6

1) possessing collateral

2) auto perfection of PMSI in consumer goods

3) filing UCC-1 filing statement

Question 7

UCC financing statement is required to contain

Answer 7

1) debtor’s name

2) name of secured party or a representative of the secured party

3) collateral covered by the financing statement

Question 8

Categories of Collateral

Answer 8

1) Tangible goods

2) intangible/semi intangible collateral

3) Determination

Question 9

Types of Tangible Goods

Answer 9

Consumer goods;
Equipment;
Inventory;
Farm products;
Fixtures

Question 10

Intaginble or semi intangible collateral examples

Answer 10

patents, stocks, proceeds from sale of collateral, accounts, promissory notes, drafts

Question 10

Which goods do a Security Interest Apply to?

Answer 10

The collateral the debtor owns at time security is granted and to collateral debtor acquires in future

Question 11

Law that Priority of creditor is governed by

Answer 11

Article 9

Question 12

Who has priority when two or more perfected secured parties w same rights to collateral

Answer 12

whoever files or perfects first has priority

Question 13

A pruchase money security interest exists w these two types of collateral

Answer 13

1) goods

2) software

Question 14

A PMSI exists in goods that

Answer 14

i) loan given to debtor to enable debtor to acquire rights in or use of goods and value given was so used; or

ii) a secured party sold goods to debtor and debtor incurs obligation to pay security party all or part of purchase price (ie sale of goods on credit)

Question 15

IF secured party perfects before or within 20 days after debtor receives possession of collateral a PMSI in goods other than inventory or livestock prevails over

Answer 15

all other security interests in collateral, even if they were previously

Question 16

Knowledge by purchase money secured party of conflicting prior security interest

Answer 16

does not prevent priority of PMSI over earlier perfected security interest

Question 17

General creditor

Answer 17

One who has a claim, including judgement, but has no lien or security interest w resepct to property in question

Question 18

A secured party will always prevail over a

Answer 18

general creditor

Question 19

Agricultural lien is an interest in

Answer 19

farm products such as crops or livestock that secures payment for either goods or services w respect to debtor’s farming operation or rent on real property leased in connection w a farming operation

Question 20

Right to redeem collateral is held by

Answer 20

debtor, secondary obligor or any other secured party

Question 21

To redeem collateral, redeemer/debtor must

Answer 21

pay off the loan in full and can reclaim its property.

fulfill all obligations secured by collateral and reasonable expenses, including attorney’s fees, incurred by the secured party in retaking collateral or preparing for its disposition