Exam 23: Credit and Secured Transactions

If the collateral is inventory,the perfected purchase money security interest prevails if the purchase money secured party gives written notice of the perfection to the perfected nonpurchase money secured party.

In order to perfect a security agreement,a security agreement must be filed.

With the remedies of attachment and execution allowing access to a debtor's assets where there is no security agreement,why would a party go to the trouble of securing a loan?

Which of the following gives a mortgagor the right to regain title to property after default?

How should the Internet affect the rules for attachment and perfection of security interests?

In general,with regard to a loan connected with real property,a deed of trust can be used to accomplish the same result as a mortgage,since the deed of trust is an instrument that gives the creditor a security interest in the debtor's property that is pledged as collateral.

Play4Ever Sporting Goods is a retailer of sporting goods.In 2001,Play4Ever borrowed $1,000,000 from Third National Bank,granting Third National a security interest in "all presently owned and after-acquired inventory." Third National filed a financing statement in May 2002.In early January 2002,Play4Ever borrowed $200,000 from Rocksolid Bank in order to purchase some new inventory.Play4Ever and Rocksolid signed a written security agreement,with the new inventory as collateral,and Rocksolid immediately filed a financing statement.Prior to the Play4Ever's receipt of the inventory,Rocksolid sent written notice to Third National Bank of the new security interest.If Play4Ever defaults on both loans,which of the following is true?

Unless otherwise stated in a security agreement,if a debtor sells,exchanges,or disposes of collateral subject to such an agreement,the secured party automatically has the right to receive the sale proceeds of the sale,exchange,or disposition.

Secured transactions usually involve:

A secondhand buyer of consumer goods that were subject to a purchase money security interest while in the hands of the original buyer takes those goods free of the purchase money security interest:

Attachment is a post-judgment court order that permits the seizure of a debtor's property that is in the debtor's possession.

Credit may be extended on either an unsecured or a secured basis.

When a valid security interest becomes effective as between debtor and creditor,it is said to:

Sandy purchases a piece of equipment to use in her business.The seller of the equipment extended credit to Sandy to enable her to purchase the equipment.Sandy signs a security agreement,but the seller of the equipment does not file a financing statement anywhere.Sandy defaults on the loan,and the seller of the equipment wants to get possession of the equipment.The amount owed to the seller of the equipment is Sandy's only debt.Can the seller repossess the equipment?

Embellishment is a post-judgment order that permits the seizure of a debtor's property that is in the possession of third parties.

If there is a default on a secured credit transaction,the only remedy is litigation.

A floating lien can attach to which of the following?

Recording statutes give potential lenders or purchasers of real property the ability to determine whether there are any existing liens on the property.

Federal law specifies where a financing statement must be filed in order for it to be valid.

All states except Nevada and Wyoming permit foreclosure sales.