Secured Transactions Definitions

Question 1

Secured Transaction

Answer 1

Under UCC Article 9, a loan or purchase that is secured by collateral. The debtor gives the creditor a security interest in the debtor’s specific property (collateral) to assure the debtor will perform (repay the loan, pay the purchase price)

Question 2

Security Interest

Answer 2

An interest in personal property or fixtures that secures payment or performance of an obigation

Question 3

Three Parties in a Secured Transaction

Answer 3

i. Secured party
ii. Obligor
iii. Debtor

Question 4

Secured Party

Answer 4

The person in whose favor the security interest is created under the security agreement.

(Usually the person who has loaned the money or extended credit to the obligor)

Question 5

Obligor

Answer 5

A person who must pay (or otherwise perform) with respect to the obligation that is secured by a security interest in the collateral

Question 6

Debtor

Answer 6

A person who has an interest other than a security interest or other lien, in the collateral, such as the sole owner of the collateral

(Usually, the debtor is the same as the obligor, but they need not be)