Secured Transactions Flashcards

1
Q

Filing a financing statement is required to perfect a security interest on consumer goods: TRUE or FALSE?

A

FALSE. Automatic perfection

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2
Q

If the purchase money security interest is on consumer goods, the following is required for its perfection: filing of a financing statement OR taking possession?

A

Neither, if PMSI is on consumer goods.

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3
Q

If the purchase money security interest is on non-consumer goods, the following is required for its perfection: filing of a financing statement OR taking possession?

A

Either, if PMSI is on non-consumer goods.

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4
Q

If PMSI is a consumer good (including equipment), filing a financing statement will retroact the perfection if filed within how many days?

A

Within 20 days of attachment, perfection is retroactive.

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5
Q

Filing a financing statement to perfect a purchase money security interest is only required if the goods are: consumer goods OR non-consumer goods?

A

Non-consumer goods

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6
Q

Once a financing statement is filed, it is effective for an indefinite period of time provided continuation statements are timely filed: TRUE or FALSE?

A

TRUE

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7
Q

TRUE or FALSE: The order of priority for the sales proceeds of a repossessed collateral is:

  1. Debt owed to the primary secured creditor
  2. Reasonable expenses of the sale
  3. Debtor
  4. Debt owed to subordinate creditors
A

FALSE.

  1. Reasonable expenses of the sale
  2. Debt owed to the primary secured creditor
  3. Debt owed to subordinate creditors
  4. Debtor
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8
Q

Which of the following is not required for PMSI to be enforceable:
A. Value has been given (past or present)
B. Secured party received security agreement describing the collateral authenticated by the debtor
C. Financing statement has been filed with the requisite agency
D. Debtor has rights in the collateral

A

C. Financing statement has been filed with the requisite agency

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9
Q

Under the UCC, a financing statement must contain which of the following:
A. Listing or description of the collateral
B. Signature and address of the debtor
C. Dollar value of amount owed
D. Name and address of the creditor

A

A. Listing or description of the collateral
B. Signature and address of the debtor
D. Name and address of the creditor

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10
Q

When the consumer goods is inventory, filing a financing statement is required to perfect the PMSI: TRUE or FALSE?

A

TRUE

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11
Q

When PMSI is on consumer goods and perfection is automatic, filing a financing statement is not required in any circumstances: TRUE or FALSE?

A

FALSE. Required within 20 days (will retroact) to protect rights against subsequent good faith consumers

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12
Q

Which of the following is not a responsibility of a secured creditor to the debtor in connection with the security agreement:
A. To use reasonable care to preserve any collateral in its possession
B. To confirm the balance of the debt upon request
C. To assign the security interest to another party at the debtor’s request
D. To release the collateral upon repayment, using a termination statement

A

C. To assign the security interest to another party at the debtor’s request

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13
Q

Automatic perfection for consumer goods applies to: purchase money security interests OR security interests

A

PMSI

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14
Q

Under the UCC, a security agreement collateralizing a debt of less than $500 may not be in writing in order to be enforceable: TRUE or FALSE?

A

FALSE. Must still be in writing.

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15
Q

Under the UCC, a security agreement where the collateral is in the possession of the secured party must be in writing to be enforceable” TRUE or FALSE?

A

FALSE. It does not have to be in writing.

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16
Q

What is the correct order of priority for multiple perfected security interests? In order of perfection OR attachment?

A

In order of perfection

17
Q

What is the correct order of priority for multiple unperfected security interests?

A

In order of attachment