Types of Security Interest Collateral Flashcards
Security Interest Definition
A security interest is an interest in personal property or fixtures that secures payment or performance of an obligation.
PMSI
A purchase-money security interest is created when a creditor advances credit or provides the funds needed to make a purchase possible and takes a security interest in the goods purchased.
Consumer goods
Goods used or primarily bought for the household, personal or family use are consumer goods.
Farm products
Crops, livestock or supplies used or produced in farming are farm products.
Inventory
Goods held for sale or lease, to be furnished under service contracts, and materials used or consumed in business for a short time are inventory.
Equipment
Goods that are not consumer goods, inventory or farm products are equipment. Equipment will include goods primarily used in business.
Instruments
Promissory notes, checks and certificates of deposit are instruments.
Documents
A document is one that represents the right to receive goods.
Chattel Paper
Chattel paper is a record which can evidence both a monetary obligation and a security interest or lease in specified goods.
Investment Property
Stocks, bonds and mutual funds are investment property.
Account
A right to payment for property or services rendered is an account.
Deposit Account
An account maintained with a bank is a deposit account.
Tort Claim
A tort claim is one where the claimant is an organization, or the claimant is an individual, the claim arose out of the defendant’s business or profession, and the claim does not include damages for personal injury or death of an individual.
General Intangibles
All personal property not specifically defined is a general intangible.
Original Use Test
Under the original use test, the original intended use of the collateral governs the collateral’s classification.
