Secured Transactions

Question 1

Preamble

Answer 1

TX variety of UCC 9 governs security interest in collateral, including personal property, fixtures, agricultural liens, and certain intangibles. The law of secured transactions protects debtors when the two have ongoing mutual financial responsibilities.

Question 2

How do you Accomplish Perfection

Answer 2

1. possession
2. control
3. filing
4. mere attachment
5. title certificate

Question 3

Tangible Collateral Categories

Answer 3

1. inventory
2. equipment
3. consumer goods
4. farm products

Question 4

Attachment Req

Answer 4

1. SA
2. debtor has rights in collateral
3. creditor gives value

Question 5

Purchase Money Security Interest (PMSI)

Answer 5

1. creditors who have PMSI are afforded special right to perfect by mere attachment for consumer goods
2. creditors are given a 20 day grace period to file for non-inventory collateral
3. date then relates back to attachment date

Question 6

Types of Collateral

Answer 6

1. goods
2. intangibles and semi-intangibles
3. proceeds

Question 7

When Possession Qualifies as Perfection

Answer 7

1. all classes of collateral except
2. general intangibles
3. accounts
4. non-consumer deposit accounts
5. non-negotiable docs
6. e-chattel paper

Question 8

Who has Priority (Unperfected v. Unperfected)

Answer 8

1st to attach

Question 9

Who has Priority (Perfected v. Unperfected)

Answer 9

Perfected

Question 10

Who has Priority (Perfected v. Perfected)

Answer 10

1st to file or perfect

Question 11

Secured Parties that have Control

Answer 11

1. SP w/ control have priority

2. more than one controls, then first to acquire control

Question 12

Factors Considered when Determining Reasonableness of Repossession Sale

Answer 12

1. effort to maintain best price
2. sufficiency of advertising
3. cleaning or repairs needed
4. time and please convenience,
5. whether public

Question 13

List Intangible & Semi-Intangible Collateral

Answer 13

1. instruments
2. documents
3. chattel paper
4. accounts
5. deposit accounts
6. investment property
7. commercial tort claims
8. general intangibles

Question 14

Way Security Interest Created (Attachment)

Answer 14

1. value given to secured party
2. contract + reasonable description of collateral/property
3. debtor must have rights in collateral

Question 15

Way Perfection Occurs

Answer 15

1. attachment + act of perfection
2. filing financing statement
3. taking possession
4. taking control
5. automatic perfection
6. temporary perfection

Question 16

Unperfected vs. Judicial Lien Creditor (Winner)

Answer 16

who becomes JLC before other party perfects wins

Question 17

Perfected vs. JLC

Answer 17

first in time, first in right

Question 18

Hierarchy of Collateral Interest

Answer 18

1. BIOC, HIDCs, and like (prevail over)
2. PMSI holders w/ superiority (prevail over)
3. perfected secured creditor:
   perf vs. perf: 1st to file or perfect
   lien creditors:
   perf vs. LC: 1st to perf SI or attach lien (prevail over)
4. unperf secured cred: 1st to attach wins (prevail over)
5. debtor and general unsecured creditors

Question 19

How is a SI Created

Answer 19

1. value
2. contract
3. rights

Question 20

When Default on SA - Rights Creditor Has

Answer 20

1. repossess prop
2. w/out breach of peace
3. w/out any specific process
4. giving notice
5. or judicial process
6. can sell property at pub/private sale
7. sure to collect deficiency

Question 21

When Control is Effective Perfection

Answer 21

1. non-consumer deposit accounts
2. e-chattel paper
3. investment property

Question 22

When Perfection is Automatic

Answer 22

1. PMSI
2. small scale assignments of accounts
3. sales of payment intangibles and promissory notes
4. beneficial interest in dependents estate
5. certain investment property

Question 23

Unperfected Secured Party vs. Buyer/Lessee

Answer 23

1. unperfected party will lose if B takes w/out knowledge of SI
2. gives value
3. receives delivery
4. exception SMSI grace period

Question 24

Perfected Secured Party vs. Buyer/Lessee

Answer 24

1. perfected party will win

2. exception BIOC

Question 25

When Secured Party Fails to Comply w/ Default Code Req

Answer 25

1. liable for actual damages 2. minimum 10% cash price of goods + amount equal to all interest charges be paid over life of loan (consumer) 3. loss default judgment remedy

Question 26

When Financing Statement be Removed

Answer 26

1. underlying obligation extinguished 2. w/in 20 days of notice or 1 mo of satisfaction 3. debtors request (non consumer)

Question 27

4 Types of Tangible Collateral

Answer 27

1. consumer goods 2. equipment 3. inventory 4. farm products

Question 28

Contents of Financing Statement

Answer 28

1. filed w/ SOS 2. debtors name and addy 3. creditors name and addy 4. indication of collateral 5. description of real property