Secured Transactions Flashcards
Attachment
when security interest becomes enforceable against debtor. takes place when value is given, the debtor has rights in the collateral and one of the following is true: (1) secured party possesses the collateral (2) secured party has control of collateral or (3) the secure party has a signed security agreement
Collateral
property subject to a security interest
Consumer goods
type of collateral that was purchased for personal use
Debtor
party in a secured transaction who owes an obligation to the secured party
Default
when the debtor fails to make scheduled payment to a secured party allows the secured party to take action against the collateral
Equipment
type of collateral that was purchased for business use
Financing statement
document filed with the state government that perfects security interest in collateral
Floating lien
security interest in the future inventory or equipment that the debtor acquires
Inventory
collateral that was purchased for resale
Perfection
when the secured party’s security interest is enforceable against third parties (cannot occur before attachment)
Pledge
when the secured party perfects by taking possession of the collateral
Purchase money security interest (PMSI)
arises when secured party extends credit to a debtor to purchase a specific good and takes security interest in that specific good
secured party
creditor who receives a promise from the debtor to repay a debt, and provides collateral to ensure repayment of debt
Security agreement
contract between debtor and secured party, which creates security interest in the collateral
security interest
interest in the collateral that helps to assure repayment of debt
