Secured Transactions Flashcards Preview

Regulation - Business Law 2013 > Secured Transactions > Flashcards

Flashcards in Secured Transactions Deck (6)
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2
Q

When does a security interest attach; or become legally enforceable?

A

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

3
Q

What are the characteristics of perfection of interest in a secured transaction?

A

Gets higher priority over others claiming rights to collateral after the perfection takes place Attachment must take place BEFORE perfection

4
Q

How does perfection occur in a secured transaction?

A

By filing a financing statement By possessing the collateral

5
Q

When does automatic perfection occur in a secured transaction?

A

Store sells a consumer good on credit - Store retains security interest A bank finances the purchase of a consumer good - Bank retains security interest

6
Q

What are the priority rules for payment in a secured transaction?

A

If two parties are perfected; then the first one to file wins If neither party is perfected; then the first one to attach wins

7
Q

What are the advantages of a creditor holding a lien in a secured transaction?

A

Creditor holds priority over claims to collateral vs. unperfected security interests Beats perfected security interests filed after lien attachment Exceptions: Purchase money security interest; which has a 10 day grace period to be filed Buyers purchasing in the ordinary course of business are immune from security interests held by merchants