Vocabulary

Question 1

Purchase Money Security Interest (2 kinds)

Answer 1

PMSI!
Legal thing NOT K

(1) Seller Financial PMSI:
- Secured party sells debtor collateral on credit & retains a security interest in the item sold

(2) Financer Financed PMSI:
- An enabling loan: (1) a loan to a debtor that enables the debtor to buy specific collateral and (2) Creditor takes a security interest in the (3) Specific collateral

NOTE: The credit or loan proceeds MUST actually be used to acquire the collateral

Question 2

Attachment

Answer 2

Deals w/those steps legally required to give the secured party a security interest in the collateral that is effective AS AGAINST THE DEBTOR. Once a security interest attaches, it is effective against the debtor and the creditor has all of the rights of a secured creditor under Art. 9.

A creditor is NOT a secured creditor until attachment.

Question 3

Perfection

Answer 3

Deals w/those steps legally required to give the secured party an interest in the collateral that is effective AS AGAINST THE WORLD (other creditors). In general, perfection is the process of giving public notice of the security interest to the world.