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Flashcards in Perfection by Filing Deck (20)
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-process by which SI becomes enforceable against the debtor with respect to the collarteral



generally gives the secured party superior rights in the collateral to an unperfected party and possible over other secured parties


Perfection requires

1) filing a finacing statment
2) possession of the collateral
3) control over the collateral
4) automatic perfection



-you file a financing statement
-filing is good for anything BUT deposit accounts, money, letter-of-credit
-puts other creditors on notice that there may be a SI


Filing Statement MUST contain

1) debtor's name
2) secure party's name AND
3) description of collateral


Extra info needed for real-prop related collateral

1) an indication that it covers the type of collateral
2)an indication that it is to be filed in the real prop records
3) description of the RP to which the collateral relates and
4) name of a record owner of the RP if the debtor does not have an interest of record in the real prop


Debtor's name

-must be its correct legal name and cannot be seriously misleading
-if not correct, could void the financing statement filing
-Safe harbor: makes a FS with an incorrect debtor's name is valid if a search for the correct name in the filing office would uncover the misleading financing statement


Texas Individual Debtors

-if have a state DL or ID card, the FS is only correct if it has the name of the person as it appears on ID (most recent card if multiple)
-no license or ID card, FS must contain the surname and first personal name of debtor


Corp Name (debtor)

-if debtor is a registered org, the debtor's name for purposes of the FS is the name shown on the public registration records (art of incorp)
-filing under trade name is insufficient


Changed Legal name (debtor)

-if debtor changes his name causing FS to become seriously misleading, secured party has 4 months in which to file an amendment to the FS.
-If doesn't do in the time frame, collateral acquird by debtor after the 4 month period is not covered by the financing statement


Secured Party's name

-error doesn't effect the perfection of a SI on a FS, but can't be seriously misleading
-may be subject to estoppel in favor of a holder of a conflicting claim in the collateral



-must sufficiently indicate the collateral
-can be satisfied by a description that meets the requirements for the SA OR
-can be super generic (all debtor's assets)
-FS description can be much broader than the SA


After acquired prop

-FS does not have to mention that it covers after-acquired prop, the descpiption must still be broad enough to cover such collateral
-FS need not make reference to proceeds in order for SI in proceeds to be perfected



-debtor is not required to sign the FS but they must authorize filing in the authenticated record
-authenticated SA automatically authorizes a filing with respect to the collateral covered in the SA


Where to file

-SOS where the DEBTOR is located
-individuals- principal residence
-registerd org ( like corps)= state where registered
-unregistered org (partnerships)- state where maintains its place of business. More than 1, located where it has its chief executive office


exception-where to file

-RP related collateral
-filed in the RP records in county where the prop is located


Texas Assignments of Rents Act

-a SI in rents arising from RP is perfected when the document is creating the assignment is recorded in the county in which any part of the property is located


Additional Info required

-errors wont necessarily destroy effectiveness of the FS:
-address of both the debtor and the secured party and
-identify whether the debtor is an individual or organization
-SOS still accepts without one of these even though required and is still fully effective


effect of filing errors

-if FS is missing any of the required info then the filing office may reject the FS and it is treated has having not been filed
-if filing office's rejection is unjustified the FS is treated as having been filed except with respect to a purchase of the collateral who gives value in reasonable reliance upon the absence of the record from the files
-"purchaser" covers subsequent secured parties --> broad
-filing office's incorrect indexing of a financing statement does not effect the effectiveness of the filed FS


duration of FS

-effective for 5 years from date of filing
-to continue, continuation statement must be filed within 6 months of the expiration of the FS
-debtor's authorization not needed
-terminate: term prior to 5 year by filing a term statement