Secured Transactions - 19

Question 1

What must a secured creditor do

Answer 1

must use reasonable care to preserve collateral

must confirm the unpaid amount when asked

must send a letter terminating it when debt has been repaid

Question 2

When is a secured interest enforceable

Answer 2

Under UCC a security interest become enforceable when value has been given up, the secured party gets a written agreement , and the debtor has rights in the collateral

Question 3

Under secured transaction - what is the order of payment

Answer 3

When you sell the collateral

1 - expenses of the sale
2 - primary secured creditor
3-debt owed to subordinate creditors

4- the rest reverts to the debtor

Question 4

When does it not have to be in writing

Answer 4

if the collateral is in the possession of the secured party - no need to be in writing to be enforceable

Question 5

When is a secured transaction automatically perfected

Answer 5

when a retailer sells a laptop to a customer - this creates a PMSI - and is automatically perfected at the time of attachment

If the consumer sells to anoretic party - this is a problem

Question 6

When must you have a financing statement filed

Answer 6

when its inventory.

you must file a financing statement in order to perfect a security interests in inventor

Question 7

What about with consumer goods

Answer 7

These are automatically perfected without filing a financing statement

Question 8

What must the debtor sign

Answer 8

a security agreement

Question 9

Once filed how long is a financing statement good for

Answer 9

it is effective for an indefinite period of time as long as you file continuation statements

Question 10

Do you need to include the price in the filing

Answer 10

no - it can be excluded

Question 11

What must satisfied for a security interests to attach

Answer 11

he debtor must take action to indicate an intention to give the creditor a security interest by either giving the creditor possession of the collateral or providing a signed security agreement.

Question 12

In order for a security to be attached what must it have

Answer 12

it must have rights to the property

Question 13

what must a financing statement include

Answer 13

A financing statement requires a listing or description of the collateral, the signature and address of the debtor, and the name and address of the creditor.

Question 14

What is needed to create an enforceable security interest

Answer 14

• a security agreement
• the debtor must have rights in the collateral
• a secured party must give value

Question 15

What is one of the main element of attachment

Answer 15

The debtor must have rights in the collateral