Secured Transactions

Question 1

Filing a financing statement is required to perfect a security interest on consumer goods: TRUE or FALSE?

Answer 1

FALSE. Automatic perfection

Question 2

If the purchase money security interest is on consumer goods, the following is required for its perfection: filing of a financing statement OR taking possession?

Answer 2

Neither, if PMSI is on consumer goods.

Question 3

If the purchase money security interest is on non-consumer goods, the following is required for its perfection: filing of a financing statement OR taking possession?

Answer 3

Either, if PMSI is on non-consumer goods.

Question 4

If PMSI is a consumer good (including equipment), filing a financing statement will retroact the perfection if filed within how many days?

Answer 4

Within 20 days of attachment, perfection is retroactive.

Question 5

Filing a financing statement to perfect a purchase money security interest is only required if the goods are: consumer goods OR non-consumer goods?

Answer 5

Non-consumer goods

Question 6

Once a financing statement is filed, it is effective for an indefinite period of time provided continuation statements are timely filed: TRUE or FALSE?

Answer 6

TRUE

Question 7

TRUE or FALSE: The order of priority for the sales proceeds of a repossessed collateral is:

1. Debt owed to the primary secured creditor
2. Reasonable expenses of the sale
3. Debtor
4. Debt owed to subordinate creditors

Answer 7

FALSE.

2. Reasonable expenses of the sale
3. Debt owed to the primary secured creditor
4. Debt owed to subordinate creditors
5. Debtor

Question 8

Which of the following is not required for PMSI to be enforceable:
A. Value has been given (past or present)
B. Secured party received security agreement describing the collateral authenticated by the debtor
C. Financing statement has been filed with the requisite agency
D. Debtor has rights in the collateral

Answer 8

C. Financing statement has been filed with the requisite agency

Question 9

Under the UCC, a financing statement must contain which of the following:
A. Listing or description of the collateral
B. Signature and address of the debtor
C. Dollar value of amount owed
D. Name and address of the creditor

Answer 9

A. Listing or description of the collateral
B. Signature and address of the debtor
D. Name and address of the creditor

Question 10

When the consumer goods is inventory, filing a financing statement is required to perfect the PMSI: TRUE or FALSE?

Answer 10

TRUE

Question 11

When PMSI is on consumer goods and perfection is automatic, filing a financing statement is not required in any circumstances: TRUE or FALSE?

Answer 11

FALSE. Required within 20 days (will retroact) to protect rights against subsequent good faith consumers

Question 12

Which of the following is not a responsibility of a secured creditor to the debtor in connection with the security agreement:
A. To use reasonable care to preserve any collateral in its possession
B. To confirm the balance of the debt upon request
C. To assign the security interest to another party at the debtor’s request
D. To release the collateral upon repayment, using a termination statement

Answer 12

C. To assign the security interest to another party at the debtor’s request

Question 13

Automatic perfection for consumer goods applies to: purchase money security interests OR security interests

Answer 13

PMSI

Question 14

Under the UCC, a security agreement collateralizing a debt of less than $500 may not be in writing in order to be enforceable: TRUE or FALSE?

Answer 14

FALSE. Must still be in writing.

Question 15

Under the UCC, a security agreement where the collateral is in the possession of the secured party must be in writing to be enforceable” TRUE or FALSE?

Answer 15

FALSE. It does not have to be in writing.

Question 16

What is the correct order of priority for multiple perfected security interests? In order of perfection OR attachment?

Answer 16

In order of perfection

Question 17

What is the correct order of priority for multiple unperfected security interests?

Answer 17

In order of attachment