Secured Transactions - Enforcement Flashcards
(22 cards)
Default occurs
when debtor fails to make a payment to the secured party, but default
can occur when debtor fails to keep the collateral insured or transfers the collateral without authority
if default occurs then secured party may
- seek possesion of collateral and sell or retain it
- sue for a judgement based on the obligation
if the secured party ignores the default then
it is treated as a waiver of secured party’s rights
when a security agreement covers fixtures
the secured party may remove fixture from real property after default if security interest has priority but is liable for repair costs
A secured party with a security interest in an accession that has priority over anyone having an interest in the whole
may remove accession from the other goods
after default, secured party is entitled to
take possession or dispose collateral
What is the secured party required to do after default to get possession of the collateral?
obtain judicial process of the collateral unless posession can be done without breach of peace
aftre default a secured party may ______ of all or any of the collateral
sell, lease, license, or dispose
all aspects of the disposition must be
commerically reasonably
A disposition is commercially reaosnable when it is conducted
- in the usual manner on a recognized market
- at the price current in that market or
- in conformity with reasonably commercial practices
- disposition may be by public or private sale, but the secured party cannot purchase collateral at a private sale
notice of disposition
at least 10 days before disposition, the secured party must send authenticated notification of disposition to
- debtor
- any secondary obligor
- any other secured party who has security interest perfected by filing and
- any party who has notified the secured party of a claim or interest in the collateral
a secured party must apply or pay over for application, cash proceeds of a disposition in following order:
- reasonable disposition expenses
- secured obligation
- subordinate security interests
- debtor
a secured party need only apply or pay over for application____ of a disposition if failure to do would be commerically unreasonable
non cash proceeds
if the chattel is sold the secured party at a low price then the amount of deficiency may be
adjusted to reflect the higher price that would have been realized form another person
a sale of collateral gives the buyer all of the debtor’s rights in collateral but the collateral remains
subject to any senior security interest
instead of disposing the collateral, secured party may accept collateral in full or partial satisfaction of obligation when
- debtor consents after default, to acceptance in an authenticated record or
- debtor does not object to the secured party’s proposal to accept collateral within 20 days after propsal is sent
in a consumer transaction, a secured party can accept the collateral only in
- full satisfaction of obligation
- an acceptance in partial satisfaction of obligation is not allowed
no strict foreclosure is allowed if
- consumer goods are in secured party’s possession and
- debtor has paid at least 60% of cash price (case of a PMSI) or at least 60% of the obligation (in the case of a non-PMSI).
- secured party can’t keep goods in satisfaction of the debt - they must be sold
-debtor may waive this right to force a sale of the collateral, done after default in an authenticated agreement
a debtor has the right to redeem collateral after
default but before disposition or foreclosure by paying the entire obligation and expenses incurred by the secured party in repossessing collateral or preparing for its disposition
an acceleration clause can require redeemer to tender the
entire balance of the secured obligation
the right of redemption can be waived after
default and by an authenticated agreement (except in a consumer goods transaction)
debtor’s remedies
- injunctive relief
- actual damages
- minimum statutory damages for consumer goods
- limitation on deficiency
- conversion action
