Secured Transactions MEE

Question 1

Security Interest

Answer 1

—an interest in personal property or fixtures that secures payment or performance of an obligation

Question 2

Agreement

Answer 2

a consensual agreement that provides for the SI; the substance of the transaction controls, not the form

Question 3

Secured Party

Answer 3

—the person in whose favor the SI is created under the security agreement

Question 4

Obligor

Answer 4

—the person who must pay (or otherwise perform) with respect to the obligation that is secured by the SI

Question 5

Debtor

Answer 5

the person who has interest, other than the SI or other lien, in the collateral, such as its sole owner (the debtor is usually also the obligor)

Question 6

Collateral

Answer 6

property subject to the SI

Question 7

Goods

Answer 7

anything that is moveable at time that the SI attaches; the debtor’s principal use at the time the SI attaches determines the class of the goods

Question 8

Consumer goods

Answer 8

—goods acquired primarily for personal, family, or household purposes

Question 9

Farm products

Answer 9

—goods that are crops or livestock or products of crops or livestock, and supplies that are used or produced in farming

Question 10

Inventory

Answer 10

—goods, other than farm products, held for sale or lease; are furnished under a service contract; or consist of raw materials, works in process, or materials used or consumed in a business in a short period of time (e.g., fuel)

Question 11

Equipment

Answer 11

—catchall class; consists of goods that are not consumer goods, farm products, or inventory

Question 12

Software

Answer 12

—software embedded in goods is treated as part of goods in which it is embedded; software not embedded in goods is treated as a general intangible

Question 13

Other collateral

Answer 13

—classification is determined without reference to the debtor’s use

Question 14

Chattel paper

Answer 14

one or more records that evidence both (i) a monetary obligation and (ii) a security interest in specific goods or a lease of specific goods

Question 15

Document

Answer 15

—a document of title, which confers on the holder ownership rights in goods held by a bailee

Question 16

Instruments

Answer 16

encompasses both negotiable and nonnegotiable instruments

Question 17

Investment property

Answer 17

—includes both certificated and uncertificated securities, as well as securities accounts

Question 18

Accounts

Answer 18

—the right to payment for property sold, leased, or licensed, or services rendered

Question 19

Commercial tort claims

Answer 19

—excludes tort claims by an individual for personal injury or death

Question 20

General intangibles

Answer 20

a residual category; e.g., copyrights

Question 21

Eligible Transactions

Answer 21

1. General rule—Art. 9 governs a transaction that creates an SI in personal property or a fixture
2. Leases—covered under Art. 9 when the transaction, although in the form of a lease, is in substance a secured transaction
3. Consignments—if subject to Art. 9, the consignor’s SI in the consigned goods is treated as a PMSI in inventory
4. Liens—generally not generally subject to Art. 9
5. Agricultural liens—unlike other liens, generally subject to Art. 9
6. Purchases—generally, the sale of personal property is not subject to Art. 9
7. Real property transactions—not generally subject to Art. 9; but can apply to an SI in a secured obligation (e.g., a promissory note) even though the obligation is itself secured by a transaction or interest to which Article 9 does not apply (e.g., a real property mortgage)

Question 22

Attachment of SI

Answer 22

In general—an SI that is enforceable against the debtor with respect to the collateral is said to have “attached” to the collateral

1. Requirements—(i) value given by the secured party; (ii) the debtor has rights in the collateral; and (iii) the debtor has authenticated a security agreement that describes the collateral, or the secured party has possession or control of the collateral

Question 23

Value given by the secured party

Answer 23

can be consideration sufficient to form a contract, extending credit, accepting delivery under a preexisting contract, or in satisfaction of a preexisting claim

1. Future advances—may also be secured by collateral
2. New value—when new value is required to perfect a security interest or have priority, it can consist of:
   * Money;
   * Money’s worth in property, services, or new credit; or
   * Release by a transferee of an interest in property previously transferred to the transferee.

Question 24

Debtor’s rights in collateral

Answer 24

1. Generally—the SI attaches only to the rights that the debtor has in the collateral
2. Consignments—if the consignor retains title to the consigned goods, the consignee does not have rights in them

Question 25

Security agreement

Answer 25

—the secured party must satisfy the Art. 9 Statute of Frauds (SoF)

1. Authenticated record—the security agreement must (i) be in a record; (ii) contain a description of the collateral; and (iii) be authenticated by the debtor
   * The description can list specific items or can identify the Art. 9 type of collateral (“all debtor’s equipment”) unless the collateral is consumer goods or a commercial tort claim; a super-generic description (“all debtor’s assets”) is not sufficient
   * An original authenticated security agreement can serve as a new debtor’s authenticated security agreement (i.e., the new debtor need not execute another agreement) by operation of law or by contract
2. Possession of collateral—can satisfy the SoF; the secured party’s possession must be pursuant to the security agreement
3. Control of collateral—can satisfy the SoF; the secured party’s control must be pursuant to the security agreement

Question 26

After-acquired collateral

Answer 26

1. General rule—the SI may cover collateral owned when the security is granted and also collateral that the debtor acquires after the SI is given
2. Exceptions—an after-acquired clause is not effective for consumer goods, unless the debtor acquires them within 10 days after the secured party gives value, or a commercial tort claim

Question 27

Proceeds

Answer 27

the SI attaches automatically to identifiable proceeds (i.e., whatever is acquired upon disposition of the collateral)

Question 28

Rights and duties of the secured party

Answer 28

1. Duties arising from the secured party’s possession or control of collateral—duty of care; duty to keep collateral identifiable; duty to relinquish possession or control of collateral
2. Rights and risks arising from the secured party’s possession or control of collateral—right to charge for reasonable expenses; risk of loss or damage is on the debtor; right to use or operate collateral; right to hold proceeds
3. Assignment of account rights—if the debtor assigns his right to receive payment from the account debtor to the secured party, the secured party may notify the account debtor to pay the secured party; upon receipt of notification, the account debtor may discharge her obligation only by paying the assignee

Question 29

Rights of the debtor

Answer 29

1. Accounting and other information from the secured party
2. Notification of account debtors by secured party—when account debtors are no longer required to make payments to the secured party

Question 30

Purchase-money security interest

Answer 30

1. PMSI in goods—exists when:
   * A secured party gave value to the debtor and the debtor used the value to incur an obligation that enabled the debtor to acquire goods; or
   * A secured party sold goods to the debtor, and the debtor incurred an obligation to pay the secured party all or part of the purchase price
2. PMSI in software—exists only when the debtor acquired his interest in software in an integrated transaction in which the debtor also acquired an interest in goods (e.g., a computer), and the debtor acquired that interest in the software for the principal purpose of using the software in the goods

Question 31

Accessions

Answer 31

goods that are physically united with other goods such that the identity of the original goods is not lost

SI created in collateral that becomes an accession—not lost due to the collateral becoming an accession; also, an SI can be created in collateral that is an accessio

Question 32

Commingled Goods

Answer 32

goods that are physically united with other goods such that their identity is lost in a product or mass

1. No SI in specific goods that have been commingled—but an SI may attach to the product or mass that results when the goods are commingled
2. Existing SI in collateral that subsequently becomes commingled goods—the SI is transferred to the resulting product or mass

Question 33

Perfection of Security Interest

Answer 33

—the SI is perfected upon attachment of that interest and compliance with one of the methods of perfection; perfection creates superior rights in the collateral for secured party over third parties’ rights in the collateral

Question 34

Methods of Perfection

Answer 34

—filing, possession, control, and automatic perfection

Question 35

Filing of financing statement

Answer 35

gives interested parties notice of the existence of the SI; filing is a method of perfection for any SI except a deposit account, money, or letter-of-credit rights

Question 36

Financing Statement

Answer 36

must contain (i) the debtor’s name, (ii) the secured party’s name, and (iii) a description of collateral; it is a notice filing

• Alternatives—security agreement, mortgage
• Debtor’s name—the name on the debtor’s current driver’s license or state-issued identification card (most states)
  o Debtor’s trade name—insufficient by itself; not needed if the debtor’s name is correctly provided
  o Registered organization—the name shown on public organic records (e.g., articles of incorporation)
  o Debtor’s change of name—the secured party has four months to amend the financing statement; if not done, collateral acquired by the debtor after the fourmonth period is not covered by the financing statement
  o Error in debtor’s name—a financing statement is not effective unless a standard search under the debtor’s correct name would disclose the statement
  o Error in secured party’s name—an error in the name of the secured party generally does not affect the perfection of the SI, but could subject the secured party to estoppel in favor of another claimant
• Description of the collateral—unlike security agreement, the financing statement may include a super-generic description of the collateral (“all debtor’s assets”) if the description sufficiently indicates the collateral
  o After-acquired property and future advances—a financing statement may be effective to cover after-acquired property if such property falls within the collateral described, whether mentioned or even contemplated by the parties at the time the financing statement was authorized
  o Proceeds—an SI in proceeds is perfected even if not mentioned in the financing statement
  o Error in description—the secured party must prepare a termination statement with respect to the erroneous collateral

Question 37

Debtor’s Authorization for financing statement

Answer 37

—required, but the debtor need not sign the financing statement

• “Ipso facto authorization”—the debtor’s authentication of the security agreement serves as authorization to file the financing statement
• The debtor’s consent to the filing is presumed when the secured party seeks to perfect an SI in any identifiable proceeds of collateral by filing

Question 38

Person entitled to file financing statement

Answer 38

any person may do so; the signature of the filer is not required

Question 39

Finance Statement Filing location

Answer 39

• Collateral related to real property—the office for recording a mortgage on the related real property; local filing
• All other collateral—the secretary of state of the state of the debtor’s location; central filing
  o Individual debtor—the state in which the debtor maintains his principal residence
  o Nonregistered organization (partnership) debtor—the state in which it maintains its place of business and, if it has more than one place of business, at its chief executive office
  o Registered organization (corporation)—the state in which it is organized

Question 40

Effective date of filing

Answer 40

upon delivery to the filing office and tender of the filing fee

• Filing office’s refusal to accept
  o Justified refusal (e.g., failure to pay fee)—the financing statement is treated as having not been filed
  o Unjustified refusal—the financing statement is treated as having been filed; the statement is effective except as to a purchaser of the collateral who gives value in reasonable reliance upon the absence of the record from the files
• Filing office’s incorrect indexing of a statement—does not affect the effectiveness of a filed statement; the risk of a filing-office error rests on those who search files, not those who file the statement

Question 41

Length of Perfection

Answer 41

a financing statement is generally effective for five years

• Effective during this period, even though there is no obligation secured by the collateral and no commitment to make an advance, unless a termination statement has been filed

Question 42

Continuation Statement

Answer 42

effective to extend perfection for an additional five years; no need for the debtor’s signature; if not filed, the SI is treated as never having been perfected as against a purchaser of the collateral for value

Question 43

Amendment of Financing Statement

Answer 43

—filed to add or delete collateral covered by the statement; effective from the date of filing; does not extend period of effectiveness of the financing statement

Question 44

Termination Statement

Answer 44

—terminates effectiveness of a financing statement

Question 45

Possession

Answer 45

an SI in goods, instruments, negotiable documents, money, tangible chattel paper, and certificated security may be perfected by possession; perfection exists only during the period of possession

Question 46

Control

Answer 46

—perfection exists only while secured party retains control

1. Collateral perfected by control—only an SI in investment property, deposit accounts, letter-of-credit rights, electronic chattel paper, or electronic documents
2. Letter of credit rights—generally, control is the only method of perfection, unless such rights are a supporting obligation for other collateral
3. Deposit account—control is the only method of perfection

Question 47

Automatic Perfection

Answer 47

1. Indefinite period of perfection * PMSI in consumer goods—automatically perfected upon attachment; a secured party does not need to file a financing statement
2. Temporary perfection
   * New value—if new value is given under an authenticated security agreement, an SI in certificated securities, negotiable documents, or instruments is automatically perfected for 20 days from attachment
   * Delivery of collateral to debtor—if the collateral is delivered to the debtor for the purpose of selling or exchanging it, the SI in the collateral remains temporarily perfected for 20 days
   * Interstate movement of collateral or debtor
   o Movement of the debtor to another state—four-month grace period for a perfected SI
   o Movement of collateral to debtor in another state—one-year grace period for a perfected SI
   o Perfected possessory SI—no effect on perfection when the SI is perfected under the new state’s laws
   o Effect of a lapse of perfection—the SI generally ceases to be perfected upon the expiration of the temporary perfection period

Question 48

Proceeds

Answer 48

• Temporary perfection—if SI in original collateral perfected, SI in proceeds perfected for 20 days from attachment
• Indefinite automatic perfection
  o Pursuant to financing statement—if the original financing statement is broad enough to cover proceeds or the secured party amends the financing statement to cover proceeds within 20 days, then the SI in proceeds continues to be perfected

o Cash proceeds—if the SI in the original collateral is perfected, then the SI in the identifiable cash proceeds is perfected indefinitely

o Same office—if a filed financing statement covers the original collateral and the proceeds are collateral in which an SI may be perfected by filing in the office in which the financing statement has been filed, then a perfected SI in proceeds may continue indefinitely
 Does not apply to proceeds acquired with cash proceeds
 Limitation—if the original filing ceases to be effective after the 20-day period, the SI in proceeds also ceases to be automatically perfected

Question 49

Non-A9 Rules: Notation for Vehicles

Answer 49

—a non-Art. 9 statute controls the manner of perfection; filing is not sufficient if a statute requires a notation of the SI on the certificate of title

Question 50

Timing of Perfection

Answer 50

—upon (i) attachment of the SI and (ii) compliance with a method of perfection; if there is a change in the method of perfection without a lapse, then the perfection dates from the date on which the SI is first perfected

Question 51

Priorities

Answer 51

Art. 9 prioritizes claims and pays them in order; the holder of a priority can agree to subordinate his interest to another’s interest

A. Claimants—creditors, transferees/buyers, other secured parties B. Creditors

1. General creditor (unsecured)—has a claim, including a judgment, but no lien on or SI in collateral
   * Result: an SI always prevails over a general creditor’s rights in the debtor’s collateral
2. Judicial lien creditor—acquires a lien on the collateral by a judicial process
   * Result: a perfected SI has priority over a judicial lien; a judicial lien has priority over an unperfected SI unless the only reason the SI was unperfected was that the secured party had not yet given value
   o PMSI exception—if a PMSI is perfected before or within 20 days after the debtor receives possession of the collateral, the PMSI has priority over a creditor’s rights that arose between the time of attachment of the SI and filing
   o Advances—an SI securing an advance is subordinate to a lien creditor’s rights when the advance is made more than 45 days after the person becomes a lien creditor, unless the advance or commitment is made without knowledge of the lien
3. Statutory or common-law lien creditor—has a possessory lien on the collateral by statute or common-law rule (i.e., a nonconsensual lien)
   * Result: a possessory lien has priority over any SI if the lien secures payment for goods or services furnished in the ordinary course of business (e.g., mechanic’s lien) unless a statute provides different priority rule

Question 52

Transferees

Answer 52

obtain full title to collateral as result of a transfer from the debtor

1. General rules
   * Transferee v. secured party with an SI—the SI generally continues in the collateral unless the secured party authorized the transfer free of the SI
   * Buyer’s rights v. unperfected SI—the buyer takes the collateral free of the SI if the buyer (i) give value, and (ii) receives delivery, (iii) without knowledge of the SI
   * Buyer’s rights v. perfected SI—the buyer generally takes the collateral subject to the SI

Question 53

Buyer in the ordinary course of business (BIOCOB)

Answer 53

—(i) buys goods (not farm products) by giving new value (cash, etc., not satisfaction of existing debt); (ii) in the ordinary course; (iii) from a seller in the business of selling goods of that kind; (iv) in good faith; and (v) without actual knowledge that the sale violates another’s rights in the goods

• Result: BOCB takes free of any SI in goods given by buyer’s seller

Question 54

Consumer Buyer

Answer 54

—(i) buys consumer goods for value; (ii) for his own personal, family, or household use; (iii) from a consumer seller; and (iv) without knowledge of the security interest

• Result: a consumer buyer takes free of any SI in consumer goods unless a secured party has filed a financing statement covering the goods (“garage sale” rule)

Question 55

Purchasers of Chattel Paper

Answer 55

(i) gives new value and has possession/control of collateral; (ii) purchase is made in good faith and in the ordinary course of business, and (iii) the chattel paper does not indicate an assignment to an identified assignee (for an SI claimed as proceeds of inventory), or a purchase made without knowledge that the purchase violates secured party’s rights (for all other SIs)

• Result: a purchaser of chattel paper has priority over an SI in the chattel paper

Question 56

Buyer of negotiable instrument or document

Answer 56

the buyer takes free of any SI

Question 57

Buyer not in the ordinary course of business (future advances)

Answer 57

• The buyer generally takes free of any SI that secures an advance made after the earlier of (i) the time the secured party acquires knowledge of purchase or (ii) 45 days after purchase
• The buyer takes subject to the SI if the advance is made pursuant to a commitment entered into without knowledge of the buyer’s purchases and before the expiration of the 45-day period

Question 58

Transferee of money or funds

Answer 58

—generally takes free of an SI in money or funds; a debtor is not treated as a transferee

Question 59

A2 Security Interest

Answer 59

—an Art. 2 SI of a buyer or seller with possession of the goods has priority over an Art. 9 SI

Question 60

“Clean” Certificate of Title

Answer 60

—a buyer without knowledge of a prior SI not noted on the title takes the goods free of that SI

Question 61

General Priority Rules among Secured Parties

Answer 61

• Perfected SI v. perfected SI—the first to file or perfect has priority; a lapse in filing or perfection restarts the clock
• Perfected SI v. unperfected SI—a perfected SI has priority over an unperfected SI
• Unperfected SI v. unperfected SI—the first to attach has priority (“first in time, first in right” rule)

Question 62

PMSI Priority Rules

Answer 62

• PMSI v. non-PMSI—generally, a PMSI has priority over a prior non-PMSI SI
• PMSI in goods other than inventory or livestock v. any SI—a PMSI has priority if perfected before or within 20 days after the debtor receives possession of collateral
• PMSI in inventory or livestock v. any SI—a PMSI has priority if perfected by the time the debtor receives possession of the collateral, and the purchase-money secured party sends an authenticated notice of the PMSI to the holder of any conflicting SI before the debtor receives possession of the collateral (notification is required only when the SI was perfected by filing)
• Perfected PMSI v. perfected PMSI—the first to file or perfect has priority
  o Exception—a seller with a PMSI has priority over a lender with a PMSI
• Proceeds from PMSI in goods—priority of a PMSI in goods generally extends to the proceeds of the original collateral, if the SI is perfected when the debtor receives possession of collateral or within 20 days thereafter

Question 63

Fixtures Priority Rules

Answer 63

• SI in fixtures versus real property interest—an SI in fixtures has priority over an interest in the real property with which the fixtures are associated if the SI in fixtures is perfected by a fixture filing before the real property interest is recorded
• Perfected SI in fixtures versus subsequent judicial lien—a perfected SI in fixtures has priority
• PMSI in fixtures v. prior real property interest—a PMSI in fixtures has priority if it is perfected by a fixture filing before the goods become fixtures or within 20 days thereafter
• SI in fixtures v. prior construction mortgage—a prior construction mortgage has priority if recorded before the goods become fixtures

Question 64

Proceeds Priority

Answer 64

• General rule—“first to file or perfect” rule applies; the filing or perfection date for the original collateral is the filing or perfection date for the proceeds

o Proceeds of non-filing collateral—the priority of the original collateral generally continues in the proceeds if the SI in the proceeds is perfected and the proceeds are cash proceeds or proceeds of same type as the original collateral

Question 65

Future Advances Priority

Answer 65

General rule—“first to file or perfect” rule generally applies; perfection generally dates from the time the advance is made

Question 66

Accessions Priority

Answer 66

general priority rules govern; after default, a secured party may have the right to remove the accessio

Question 67

Investment property, deposit accounts priority

Answer 67

an SI held by a secured party with control over the collateral has priority over a secured party without control over the collateral

Question 68

Circumstances constituting default

Answer 68

1. In general—a security agreement is a contract; contract law determines the enforceability of any terms in a security agreement
2. Agreement not to assert defenses against an assignee—permitted by Art. 9

Question 69

Consequences of default

Answer 69

the secured party may (i) seek possession of the collateral and sell it or retain it, or (ii) sue for a judgment based on the obligation

1. Cumulative remedies, simultaneous exercise
2. Ignoring default—may be treated as waiver of the secured party’s rights
3. SI in fixtures—the secured party may remove the fixture from the real property if the SI has priority; the secured party is liable for repair costs
4. SI in accession—the secured party may remove the accession from other property if the accession SI has priority
5. Secured party and account debtors—upon default, the secured party may notify an account debtor to pay the secured party

Question 70

Possession of Collateral

Answer 70

a secured party is not required to give notice of default, nor of an intent to take possession of the collateral

1. Limitation on means of possession—no breach of the peace
2. Rendering equipment unusable—permitted

Question 71

Disposition of Collateral

Answer 71

1. Standard for disposition—all aspects of the disposition must be commercially reasonable (method, manner, time, and place)
2. Price—no specific price must be obtained; the mere fact that a higher price could have been obtained does not establish unreasonableness
3. Time of disposition—no specific time is required; immediate disposition is not always required
4. Type of disposition—disposition may be by either public or private sale, but the secured party cannot purchase the collateral at a private sale
5. Notice of disposition—the secured party is generally required to send an authenticated notification of disposition
   * To—(i) debtor, (ii) any secondary obligor, (iii) any other secured party or lien holder who has an SI perfected by filing, and (iv) any party who has notified the secured party of a claim or interest in the collateral
   * When—at least 10 days before disposition
   * Exceptions to notification—(i) the collateral is perishable or threatens to decline speedily in value; (ii) the collateral is of a type customarily sold on a recognized market; (iii) the person has waived his right in an authenticated writing

Question 72

Application of Proceeds from Disposition

Answer 72

• Cash proceeds—first to reasonable disposition expenses, then to satisfy the secured obligation, then to satisfy subordinate SIs (if the secured party made an authenticated demand before distribution is complete), and any remainder to the debtor
• Non-cash proceeds—applied or paid over for application only if the failure to do so would be commercially unreasonable
• Treatment of a surplus or deficiency—generally, the debtor is entitled to any surplus and is liable for any deficiency
  o Not the case for sale of accounts, chattel paper, payment intangibles, or promissory notes
• “Low price” disposition to secured party—the amount of the deficiency may be adjusted to reflect the higher price that would have been realized from another person
• Notice in consumer goods transaction—the secured party must send written notice as to any deficiency or surplus to the debtor upon demand

Question 73

Transferee’s Rights

Answer 73

—the sale of the collateral gives the buyer at the sale all of the debtor’s rights in the collateral; the collateral remains subject to any senior SI

Question 74

Warranties

Answer 74

—the disposition of the collateral includes the warranties of title, possession, and quiet enjoyment; the warranties may be disclaimed or modified

Question 75

Acceptance of Collateral (Strict Foreclosure)

Answer 75

1. Full satisfaction of obligation—(i) the debtor consents, after default, to acceptance in an authenticated record; or (ii) the debtor does not object to the secured party’s proposal to accept the collateral within 20 days after the proposal is sent
2. Partial satisfaction of obligation—the debtor consents, after default, to acceptance in an authenticated record
3. Notification of parties other than the debtor—the secured party must notify any other secured party or lien holder of record, or person who timely notified the secured party of a claim of an interest in the collateral
4. Special rules for consumer debtors
   * Partial satisfaction—acceptance of the collateral in partial satisfaction of the obligation is not permitted in a consumer transaction; the secured party can only accept the collateral in full satisfaction of the obligation
   * Strict foreclosure—if the consumer goods are in possession of the secured party, no strict foreclosure is permitted if the debtor has paid at least 60% of the cash price in the case of PMSI, or 60% of the obligation in the case of non-PMSI; the goods must be sold, not kept in satisfaction o Waiver permitted, but only after default and in an authenticated agreement

Question 76

Redemption of Collateral

Answer 76

1. Method of redemption—the redeemer must fulfill all obligations secured by the collateral and reasonable expenses incurred by the secured party in retaking the collateral or preparing for its disposition; an acceleration clause can require the redeemer to tender the entire balance of the secured obligation
2. Time limit on redemption—redemption is not permitted after disposition or foreclosure
3. Waiver of right of redemption—only permitted after default and by an authenticated agreement, except in a consumer-goods transaction

Question 77

Remedies for Secured Party’s Failure to Comply

Answer 77

1. Basic remedies
   * Injunctive relief—sought by debtor from a court to compel or restrain the secured party

• Actual damages—any losses suffered by the debtor due to the secured party’s failure to comply with Art. 9
• Consumer goods: minimum statutory damages—a debtor or secondary obligor may recover an amount not less than the credit service charge, plus 10% of the principal amount of the obligation or time-price differential, plus 10% of the cash price, even if actual damages are less
• Limitation on deficiency for failure to comply with Art. 9
  o Commercial transactions—there is a rebuttable presumption that the secured party is not entitled to collect a deficiency; rebutted by showing that the deficiency would have nevertheless existed; no damages if the deficiency is only reduced or eliminated as a consequence of the secured party’s failure to comply with Art. 9
  o Consumer transactions—many courts apply the same rule as for commercial transactions, but some courts bar deficiency

2. Conversion action—by the debtor against the secured party for the improper possession of the collateral
3. Nonwaivable—remedies statutorily provided to debtor for secured party’s failure to comply with Art. 9
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