Test 1

Question 0

What are the 3 types of property?

Answer 0

Real Estate
Fixtures
Movable Property

Question 1

Define Collateral

Answer 1

The property that is subject to the lien

Question 2

COCB

Answer 2

Customer in the Ordinary Course of Business

Question 3

When repossessed property is sold and it sells for less that what the creditor owes what type of judgment is the creditor owed?

Answer 3

Deficiency Judgment

Question 4

When repossessed property is sold, how, in order, are the proceeds of the sale distributed?

Answer 4

Expenses from sale paid first

Whoever perfected gets paid second

Question 5

When a creditor repossesses property on which the creditor has a lien, the debtor can buy the property back under which right?

Answer 5

Right of Redemption

Question 6

4 ways to prefect a security interest?

Answer 6

Financing Statement
Attachment
Possession of Collateral
Title

Question 7

Ways to perfect a security interest by filing?

Answer 7

Financing Statement

Question 8

Ways to perfect a security interest without filing?

Answer 8

Attachment
Possession of Collateral
Title

Question 9

What is cross collateralization?

Answer 9

When you put property up for collateral at multiple banks

Question 10

What is it called when a creditor loans money to a person to buy the property on which the creditor intends to place a lien to secure the loan?

Answer 10

Purchase Money Security Interest

Question 11

What three things must occurs for attachment to take place?

Answer 11

Sign security agreement
Transfer of value
Debater has interest in collateral

Question 12

What is a floating lien?

Answer 12

A lien that floats down from inventory sold to product bought

Question 13

What is the Right to Subrogation?

Answer 13

Gives the Surety all the same rights as the creditor

Question 14

What is the Right to Indemnity?

Answer 14

Surety has right to be paid back for any expenses

Question 15

What is the Right to Exoneration?

Answer 15

When the creditor endangers the collateral, the surety could be exonerated from payment

Question 16

What is the Right to Contribution?

Answer 16

All sureties have an equal obligation to pay loan

Question 17

What does an Indemnity Contract do?

Answer 17

Pays for losses

Is like an insurance contract

Question 18

What is a Mechanic’s/Artisan’s lien?

Answer 18

Gives right to person who has supplied labor or materials to put lien on property

Question 19

Where does a Mechanic’s/Artisan’s lien come in the line of creditors? Why?

Answer 19

First, because value was added to the property

Question 20

What can the first tier creditor do to circumvent a Mechanic’s/Artisan’s lien?

Answer 20

Get a lien waiver

Question 21

What is a secured transaction?

Answer 21

A loan where the lender has a security interest in collateral

Question 22

Define perfected security interest.

Answer 22

A security interest that gives certain rights to the creditor

Question 23

Define repossession/self-help.

What can self-help not do?

Answer 23

The ability to collect the collateral of the lien

Breach the peace

Question 24

Define attachment.

Answer 24

When there is an agreement for the creditor to give the debtor valuable property in return for rights in the collateral

Question 25

Define secured transaction

Answer 25

Borrowing money where the creditor places a lien on a property to guarantee payment

Question 26

Define perfected secured transaction

Answer 26

Where the creditor fulfills one of the 4 ways to perfect in order to make sure they get first priority if debtor defaults

Question 27

What are the 4 ways to perfect?

Answer 27

File a financing statement Attachment Possession of collateral Certificate of title

Question 28

How to perfect through attachment?

Answer 28

Requires: PURCHASE MONEY SECURITY AGREEMENT Transfer of value Debtor has rights in collateral

Question 29

What is self-help?

Answer 29

The creditor can pick up the collateral in case of a default but cannot breach the peach

Question 30

What is the right to redemption?

Answer 30

Debtor can take back collateral if he can pay off 100% of loan

Question 31

Define surityship

Answer 31

Where someone comes to insure that the debtor will pay loan back

Question 32

What is an indemnity contract?

Answer 32

Insurance in case of a loss

Question 33

What is the right of Subrogation?

Answer 33

When the loan is 100% paid the surity gets rights of original creditor

Question 34

Define creditor

Answer 34

Entity that lends money

Question 35

What is After Acquired Property?

Answer 35

Property secured after the loan is made

Question 36

Define floating lien

Answer 36

Lien that floats from inventory to inventory