Secured transactions Flashcards
A financing statement is required to contain
I) debtor’s name
2) name of secured party
3) representative of the secured party
4) collateral of the covered by the financing statement
Who has priority when l there are two security interests, both of which are perfected
Whoever perfects first
A financing statement may be effective to cover after-acquired property if
Such property falls within the collateral described…
irrespective of whether after-acquired property is mentioned as such in the financing statement or even contemplated by the parties at the time that the financing statement was authorized.
In a consumer transaction, the creditor may retain the collateral in full satisfaction of the debtor’s obligation if
Debtor has not paid at least 60% of the cash price in the case of a purchase money security interest
What must a creditor do to retain the collateral in full satisfaction of the debtor’s obligation?
send the consumer a notice of the creditor’s proposal to take such action.
What happens if the consumer does not respond to creditor’s proposal within 20 days after the proposal
creditor may retain the collateral in full satisfaction of the consumer’s obligation.
When there is a conflict between a secured creditor, such as the store, and an unsecured creditor, such as the orchestra, the secured creditor has priority over the unsecured creditor with respect
The collateral on secured loan
A security interest that has attached to specific collateral generally may be enforced against the debtor upon
Debtor’s default
A security interest attaches to collateral when
1) Secured party has given value
2) debtor has rights in collateral
3) debtor has authenticated a security agreement that describes the collateral
A buyer of goods in the ordinary course of business generally takes free of
Any security interests, including perfected ones held by creditor in seller’s inventory
In order to qualify as a buyer in ordinary course, the buyer must
purchase goods from a merchant who is in the business of selling goods of that kind, in good faith, and without knowledge that the sale violates a creditor’s security interest in the goods.
Generally, cash proceeds from the sale of the collateral go first to
the payment of the collection and enforcement expenses and then to the secured party to satisfy the outstanding amount of the obligation.
What happens If there is a surplus from cash proceeds from the sale of the collateral? What happens if there is a deficiency?
Surplus: the debtor is entitled to it
Deficiency: debtor remains liable for deficiency
When a creditor has a security interest in a deposit account, which includes a savings account at a bank, a creditor may perfect its security interest only by
Taking control of the account
When a creditor has a security interest in stocks, a creditor may perfect its security interest by either
Filing financing statement with the Virginia State Corporation Commission or by taking control of the stock
