REG - 15

Question 1

What are the 3 elements required for the creation of a security interest under the Secured Transactions Article of the UCC?

Answer 1

1. value has been given
2. the secured party receives a security agreement describing the collateral authenticated by the debtor
3. the debtor has rights in the collateral

Question 2

To attach, security agreement must:

Answer 2

1. be in writing (unless in position)
2. signed by debtor
3. description of collateral

Question 3

Name the 3 requirements for an enforceable security agreement.

Answer 3

• In writing
• Signed and authenticated by the debtor
• Includes an adequate description of the collateral

Question 4

Purchase Money Security Interest (PMSI)

Answer 4

taken by a party who advanced value to the debtor to enable the debtor to acquire the rights in the collateral. A PMSI arises when a creditor extends credit that is used to purchase the collateral as a consumer good. A PMSI is perfected automatically at the time the interest attaches for consumer products that is not inventory.

Question 5

4 ways to perfect a security interest

Answer 5

1. File
2. Possession
3. Automatic
4. ?

Question 6

Types of collateral

Answer 6

• Consumer goods
• Equipment
• Inventory
• Farm products
• Fixtures

Question 7

Intangible property

Answer 7

Patents, copyrights, tademarks

Question 8

Miscellaneous collateral

Answer 8

• Proceeds
• Negotiable Instruments
• Commercial tort claims
• Judicial liens in tort claims

Question 9

Period of Perfection

Answer 9

• 5 years for filing
• Can renew any time within the last 6 months
• For perfection by possession - as long as possession continues

Question 10

Perfection

Answer 10

Possession

• Negotiable instruments
• Field warehousing
• Control of accounts

Question 11

PMSI (Purchase Money Security Interest)

Answer 11

Creditor is either seller financing purchase the goods or Lendor financing funds to purchase the goods

Automatic perfection if collateral can be ID’ed

NOT PMSI in inventory equipment