Scope of the Security Interest Flashcards
(1 cards)
1
Q
Scope
A
(A) Debt secured may include FUTURE ADVANCES
(B) Property Secured may include AFTER-ACQUIRED PROPERTY
- W/out an explicit after-acquired property clause in the security agreement, the secured party’s security interest only reaches collateral that the debtor had rights in AT THE TIME THE DEBTOR SIGNED THE SECURITY AGREEMENT
- Exception: IF turns over rapidly etc.
(C) Property Secured Generally INCLUDES PROCEEDS
- WHATEVER!
- Identifiable = Creditor can prove that those proceeds came from its original collateral
- UNLESS otherwise agreed, a security interest AUTO gives the secured party a right to IDENTIFIABLE PROCEEDS
- Remember commingling & Lowest Intermediate Balance Test
(D) The attachment of a security interest in collateral also is an attachment of a security interest in a supporting obligation for that collateral