Flashcards in Ch 30 Secured Transactions Deck (22):
When the payment of a debt is guaranteed or secured by personal property owned or held by the debtor, the transaction becomes known as a what?
Which article of the UCC governs secured transactions in personal property?
What does personal property include?
- Agricultural liens
- Chattel paper
- Commercial assignments or $1,000 or more
- Other types of intangible property (e.g. patents)
What is chattel paper?
- Personal property
- Any documents or records evidencing a debt secured by personal property
What is a fixture?
- Certain property that is attached to land
Does Article 9 cover creditor tools such as liens and mortgages on real property?
Define secured party.
Any creditor who has a security interest in the debtor's collateral
The party who owes payment or other performance of a secured obligation
Define security interest
The interest in the collateral that secures payment or performance of an obligation
Define security agreement
An agreement that creates or provides for a security interest
The subject of the security interest
Define financing statement
- a.k.a. UCC-1 form
- the instrument normally filed to give public notice to third parties of the secured party's security interest
What are the two main concerns of the creditor if the debtor defaults?
(1) Can the debt be satisfied through the possession and (usually) sale of the collateral?
(2) Will the creditor have priority over any other creditors or buyers who may have rights in the same collateral?
How are the two main concerns of the creditor if the debtor defaults met?
Through creation and perfection of a security interest
What are the three basic requirements to be met for a creditor to have an enforceable security interest?
(1) Written or authenticated security agreement
(2) Secured party must give debtor something of value
(3) The debtor must have rights in the collateral
What does an attachment give the creditor?
An enforceable security interest in the collateral
When the collateral is not in the possession of the secured party, the security agreement must be in what form?
Either written or authenticated (and it must describe the collateral)
Unless an amendment to the financing statement is filed within a four-month period following changes in the debtor's name, collateral acquired by the debtor after the period is what?
How can you perfect a security interest without filing a financing statement?
1) Transfer collateral into possession of the secured party
2) Perfected on attachment
What are two of the most common security interests that are perfected on attachment?
1) Purchase-money security interest in consumer goods
2) Assignment of a beneficial interest in a estate of a deceased person
What are the two general categories of collateral?
1) Tangible collateral
2) Intangible collateral