Flashcards in Secured Transactions Deck (6):
When does a security interest attach; or become legally enforceable?
Secured interest must be supported by consideration given. Debtor must actually own the rights to the collateral or have possession. Secured interest much be recorded
What are the characteristics of perfection of interest in a secured transaction?
Gets higher priority over others claiming rights to collateral after the perfection takes place
Attachment must take place BEFORE perfection
How does perfection occur in a secured transaction?
By filing a financing statement
By possessing the collateral
When does automatic perfection occur in a secured transaction?
Store sells a consumer good on credit - Store retains security interest
A bank finances the purchase of a consumer good - Bank retains security interest
What are the priority rules for payment in a secured transaction?
If two parties are perfected; then the first one to file wins
If neither party is perfected; then the first one to attach wins