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Flashcards in Security Interests: Perfection Deck (6)
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1

Perfection Definition

Means by which a secured party gains priority to a debtor's collateral over third parties who also claim to have an interest in the same collateral.

2

Methods of Perfecting:
Filing

1. A form
2. Name and address of both debtor and creditor
3. Contain a description of the collateral
***File at state office generally***
***Perfection occurs when file and fee tendered or upon acceptance***
- effective for 5 years and can be continued 5 more

3

Methods of Perfecting:
Posession

Creditor has possession of the collateral

4

Methods of Perfecting:
Automatic Perfection

Purchase Money Security Interest in consumer goods:
- consumer goods to be bought by person, family, etc.
- interest is taken/retained by seller to secure price (advancing funds for the purchase of collateral)
- creditor need not be a merchant
Intangibles
Promissory Notes

5

Methods of Perfecting:
Temporary Perfection

1. for 20 days from creation of interest
- certified securities, negotiable documents

6

Rights of Secured Parties on Filing for Perfection

Release: release all or part of collateral
Assignment: assign all or part of collateral
Amendment: can be amended
Information Request: available from state

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