Secured Transactions - Ramsey

Question 1

What law governs security interests and provides rules for their priority?

Answer 1

Article 9 of the UCC.

Question 2

What is the effect of attachment?

Answer 2

Attachment gives the creditor rights against the debtor in the collateral.

Question 3

How do you attach a security interest?

Answer 3

(1) Either the debtor must authenticate a security agreement granting the creditor a security interest in collateral that describes the collateral or the creditor must take possession or control of the collateral;
(2) the creditor must give value; and
(3) the debtor must have rights in the collateral.

Question 4

What is the effect of perfection?

Answer 4

A secured party that perfects its security interest obtains rights against another claimant to a debtor’s collateral.

Question 5

How can a creditor perfect its security interest in goods?

Answer 5

(1) Filing, in the proper public office, a financing statement that is authorized by the debtor in an authenticated record;

or

(2) Taking possession.

Question 6

How is a PMSI created?

Answer 6

When a creditor advances credit or provides the funds needed to make a purchase possible and takes a security interest in the goods purchased.

Question 7

How is the collateral classified?

Answer 7

Under the original use test, a debtor’s original intended use of collateral governs the collateral’s classification.

Question 8

Perfected secured party vs. Perfected secured party

Answer 8

The first secured party to file OR perfect has priority.