2. Attachment

Question 1

What is Attachment?

Answer 1

Creditor has rights of secured creditor against Debtor’s property (Art 9)

Question 2

What type of transactions is Attachment available?

Answer 2

Personal property
Fixtures
Agricultural lien
Sale of accounts/chattel paper/payment intangibles/promissory notes
Consignments

Question 3

What is required for Attachment?

Answer 3

1) Security Agreement
- In writing (record, authenticated, collateral description)
- Oral

2) Value
- Any consideration (including pre-existing)

3) Debtor’s Ownership Rights in Collateral

Question 4

What type of purchase money security interests are there?

Answer 4

Security interest
- Security interest in sold item

Enabling loan
- Security interest in specific item

Question 5

What type of clauses are there is secured transactions?

Answer 5

After-acquired property clause

• Debtor’s present property
• Debtor’s future property

Future advance clause
- Future loans (NO new security agreement required)

Question 6

What is required for after-acquired property clauses to be effective towards consumer goods?

Answer 6

Debtor acquires rights in consumer goods
Within 10 days after Secured Party gives value

UNLESS rapidly depleted/replenished collateral => Implied clause

Question 7

What proceeds may security interest cover?

Answer 7

Sale of collateral
Insurance proceeds (loss/damage)
Loss/defect/damage claims

Question 8

Are proceeds perfected?

Answer 8

Yes - If collateral is perfected, proceeds are perfected

Perfection may be maintained beyond 20 days

• Requires Secured Party to take new action
• UNLESS identifiable cash proceeds (NO new action)
• UNLESS original collateral previously perfected by financing statement (NO new action)