UCC Secured Transactions

Question 1

a creditor is under a general obligation to dispose of the asset

Answer 1

if it’s a consumer item and more than 60% of the price has been paid.

Question 2

Disposal of the asset could be waived by the debtor

Answer 2

1) only after the repossession and

2) the waiver would have to be in writing

Question 3

Before a security interest attaches

Answer 3

1) The debtor must have signed a security agreement or the goods must be in the possession of the creditor
2) the Creditor secured party must give value, and
3) the debtor must have rights in the collateral

Attachment does not require the filing of a financing statement, although such may be filed prior to attachment

Question 4

When a debtor moves collateral subject to a perfected security interest to another jurisdiction

Answer 4

the original creditor retains the status of a perfected creditor for up to four months after the collateral is moved

Question 5

Under the Uniform Commercial Code (U.C.C.) Secured Transactions Article, perfection of a security interest in a negotiable instrument

Answer 5

is achieved only by the creditor taking possession of the instrument

Question 6

Under U.C.C. 9-307, “A buyer in ordinary course of business (see also Section 9 of U.C.C. 1-201)

Answer 6

takes free of a security interest created by his seller even though the security interest is perfected and even though the buyer knows of its existence

Question 7

Similarities and Difference between a Contract Right and Easement

Answer 7

Both are intangible assets

Contract Rights - rights of personal property
Easement - rights in real property

Question 8

UCC 9: Security interest in Tangible property includes

Answer 8

consumer goods, equipment, farm products, and inventory

Question 9

A financing statement is filed to give public notice of the security interest. The statement must contain

Answer 9

the names and addresses of the debtor and the secured party.

Signature of the debtor unless the secured party is authorized by the debtor to make the filing without the signature

a statement indicating the types, or describing the items of collateral

Question 10

Under Article 9-504 of the Uniform Commercial Code (U.C.C.), obligations are paid in the following order when a secured creditor repossesses and sells the debtor’s collateral (when the debtor is in default) in a commercially reasonable manner

Answer 10

first to pay expenses incurred in selling the collateral,
then toward the debt owed to the secured party, and
next to any junior or inferior secured parties with rights in the collateral.

Question 11

Under Section 9-312 of the Uniform Commercial Code (U.C.C.), a purchase money security interest (PMSI) in noninventory (e.g., equipment)

Answer 11

takes priority over all other competing security interests in the same collateral if the PMSI is perfected by filing a financing statement properly within a 10-day grace period, that is, within 10 days after June 15, 20X1

Question 12

A pawnbroker lending money is a valid illustration of

Answer 12

a secured party perfecting its security interest by taking possession of the collateral