Secured Transactions

Question 1

consumer good

Answer 1

used for personal, family or household purposes

Question 2

inventories

Answer 2

tangible goods, held for sale or lease in the ordinary course of business
- include raw materials, work in progress, and consumed materials

Question 3

attachment

Answer 3

1) parties must have an agreement or K that the security interest attach (can be evidenced by a signed authenticated record sufficiently describing the collateral, possession or control of collateral by creditor)
2) value must be given by the secured party
3) debtor must have rights in the collateral

Question 4

floating lien

Answer 4

debtor can agree to use new property as collateral for an old loan
- security interest attaches to the after-acquired property

Question 5

PMSI

Answer 5

property used as collateral is to be acquired with a loan

Question 6

if the debtor’s name on a filed financing statement becomes insufficient due to the debtor’s name change, the financing statement is effective only against collateral acquired by the debtor…

Answer 6

before the name became insufficient and within 4 months after
- the secured party must refile using the debtor’s new name to perfect a security interest in collateral acquired after the 4 month period

Question 7

description of collateral in financing statement vs description in security agreement

Answer 7

financing statement: may be broader in terms than the security agreement and may include descriptions such as “all assets” or “all of debtor’s personal property”
security agreement: requires more specficity

Question 8

types of collateral that a secured party may not perfect by possession

Answer 8

accounts, deposits accounts, nonnegotiable documents, electronic documents and general intangibles

Question 9

when does a PMSI in consumer goods perfect

Answer 9

as soon as it attaches

Question 10

between 2 perfected security interests, priority goes to whichever party…

Answer 10

filed first or first perfected

Question 11

a PMSI in goods other than inventory or livestock has priority over conflicting security interests in the same goods and their identifiable proceeds only if the interest is perfected before or within…

Answer 11

20 days after the debtor receives possession of the goods

Question 12

the creditor has a right to take possession of and sell the collateral by self-help without the intervention of the court if the creditor does not…

Answer 12

breach the peace

Question 13

equipment

Answer 13

goods that are not consumer goods, farm products, or inventory, e.g., durable goods used in business or paintings on an office wall
- default category