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B law > Chapter 16 > Flashcards

Chapter 16 Flashcards

1
Q

Transactions where a debtor pledges personal property or fixtures to a creditor as a security for a loan or another obligation

A

Secured transactions (chattel mortgages)

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2
Q

What is a chattel

A

Item of personal property rather than real estate

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3
Q

Includes all property except real estate and items attached to real estate

A

Personal property

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4
Q

Liens on personal property which secures payments of an obligation

Allows sale of collateral if there is a defaults

A

Security interest

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5
Q

Interest in property which typically gives a creditor the right to sell property on default

A

Lien

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6
Q

Examples of liens

A

Mortgages
Security interest
Some court judgements

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7
Q

Personal property items permanently attached to real estate

A

Fixtures

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8
Q

Transfers a security interest in personal property and create a secured transaction

A

Security agreement

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9
Q

Perosnal property or fixtures subject to a security interest

A

Collateral

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10
Q

Creditor who is the holder of the security interest

A

Secured party

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11
Q

Process which causes a security interest to be enforceable against a certain piece of collateral

A

Attachment

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12
Q

Process which fixes the secured party’s level of priority to the collateral against others who also have a lien

A

Perfection

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13
Q

Written notice of a security interest filed with a government office

A

Financing statement

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14
Q

3 Types of collateral governed under article 9

A

Goods
Quasi tangibles
Intangibles

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15
Q

Article _____ covers the collaterals : goods, quasi tangibles and intangibles

A

9

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16
Q

What are goods under article 2

A

Things tangible and movable

Furniture, business equipment

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17
Q

What are goods under article 9

A

Includes fixtures

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18
Q

Documents which in themselves are evidence of a legal right

A

Quasi tangibles

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19
Q

Example of quasi tangibles

A

Negotiable instruments

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20
Q

Items of personal property with no aspect of physical existence

A

Intangibles

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21
Q

2 examples of intangibles

A

Accounts receivable

Goodwill of a business

22
Q

Does article 9 of UCC apply to real estate ? Perfection of security interest in motor vehicles ?

A

No

No

23
Q

Is attachment of security interest in and repossion of motor vehicles governed under article 9?

A

Yes

24
Q

3 requirements for attachment of security interest

A
  1. Written security agreement or secured party takes possession of collateral
  2. Secured party must give value (past or present consideration )
  3. Debtor must have rights in the collateral
25
Q

3 ways to perfect a security interest

A
  1. Take possession of the collateral
  2. Attachment of security interest
  3. Filing a financing statement
26
Q

What is a PMSI

A

Purchase money security interest

27
Q

Secures collateral that is purchased with money or credit supplied by the secured party

A

Purchase money security interest

28
Q

Written notice of the security interest

A

Financing statement

29
Q

___________ is the required method for perfection of most business transactions

A

Financing statement

30
Q

Financing statements are generally filed eith who

A

The secretary of state’s office

31
Q

Security interest which switch from one piece of collateral to another OR

Use the same collateral to secure more than one advance of money by a lender

A

Floating liens

32
Q

3 types of floating liens

A

Security interest in

Proceeds
After acquired property
Future advances

33
Q

What do proceeds consist of

A

Whatever is received in exchange for the collateral

34
Q

Property which is purchased by the debtor after the attachment of the original security interest

A

After acquired property

35
Q

Loans to be made by the secured party in the future m after the original security agreement is signed

A

Future advanced

36
Q

Statement that obtains all 3 types of floating liens

A

” this security interest covers proceeds, after acquired property and future advances “

37
Q

Who has the highest priority of security interest

A

A buyer in the ordinary course of business

38
Q

Example of buyer in the ordinary course of business

A

Buyer who buys a few items from a retail or wholesale seller

39
Q

Is a buyer who buyers a high percentage of the sellers inventory considered a buyer in the ordinary course of business ?

A

No

40
Q

_______ rule states that if perfection is only by att scheme the someone who purchases the collateral from the consumer will nkt be subject to the security interest

A

Garage sale rule

41
Q

Creditor who obtains a lien upon property of the debtor because of a judgement

A

Lien creditor

42
Q

A ______ in bankruptcy is a lien creditor

A

Trustee

43
Q

4 rights the creditor has for a debtor who fails to pay

A

Repossession
Repossession sale
Retain collateral
Ignore the security interest and sue on the promissory note

44
Q

Most common option for creditor when dealing with a debtor who fails to pay

A

Repossession

45
Q

2 requirements for actual repossession

A
  1. Must give notice to debtor to cure any default

2, without a breach of peace

46
Q

When does a breach of peace occur

A

If party breaks into area that the other expects to be private or uses violence/threat to obtain possession of collateral

47
Q

Will the court allow any trespasses onto real estate for repossession ?

A

Yes minor

48
Q

Example of repossession sale (4)

A

Auction
Advertised sale
Sealed bids
Sale by a car dealer

49
Q

The party may not retain the collateral in a consumer transaction if more than ___% if the purchase price has been paid

A

60

50
Q

Highest to lowest priority for how proceeds will be divided after repossession sale (4)

A
  1. Expenses of repossession sale (attorney fees, fees involved in reposessing, holding snd preparing collateral for sale)
  2. First lien holder
  3. inferior lien holder
  4. Debtor
51
Q

T or F. If creditors don’t file termination statements are they liable for damages to the debtor ?

A

T

52
Q

T of F. Landlords are liable for inadequate security in high crime areas

A

True

B law (4 decks)

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