Exam 27: Secured Transactions and Electronic Filing

A termination statement is filed by the debtor when a secured debt is paid off.

Under Article 9 of the UCC,"protection of the buyers of goods" means that which of the following is true?

Which of the following would relieve a creditor of filing a financing statement?

If a sale of collateral produces any surplus funds after paying expenses and the underlying debt,the debtor is entitled to the surplus.

A certificate of filing indicates whether there are any currently effective financing statements naming a particular individual as the debtor.

John bought a television from Jake's Appliance Center for his personal use.John could not pay cash for it,so he signed a note and gave Jake's a security interest in the television.Jake's did not file a financing statement.About 6 months later,John sold this television to a neighbor,Jane,who did not know about Jake's security interest in it.John stopped making payments on the note to Jake's,and now Jake's wants to repossess the television from Jane.Can Jake's repossess this television from Jane?

Which of the following is true about service providers' liens on personal property?

A purchase money security interest in a motor vehicle is covered by the automatic perfection rule.

If a security interest is perfected but thereafter becomes commingled with other goods that also have perfected security interest ultimately resulting in a product or mass and loss of identity,how does the security interest rank?

If an affected secured party fails to file or send a termination statement as required,he or she is liable to the debtor for $1,000.

Which of the following is true about when perfection and attachment occur?

A financing statement can be filed regardless of a creditor's physical possession of the collateral.

A purchase money security interest automatically perfects the creditor's security interest at the time of sale.

Which of the following items does not need to be included in a financing statement?

Arthur borrowed $2,000 from Doug,and gave Doug his car as security for the loan.Doug does not file a financing statement.Carrie obtains a judgment against Arthur and wants the car.Can she get it?

The filing requirements for security interests can be different in the various states,but the office of the secretary of state and the county clerk's office are often where the filing is to be made.

A buyer in the ordinary course of business is a person who,with knowledge of another's ownership or security interest in goods buys the goods,in the ordinary course of business from a person in the business of selling goods of that kind.

What risks are there for lenders who rely on the debtor's inventory for collateral? Although the rule that a buyer in the ordinary course of business takes the item free of an inventory security interest makes buyers more willing to purchase items from inventory,does it not discourage lenders from financing inventory? What can lenders,who rely on merchants' inventory for collateral,do to protect themselves?

The automatic perfection rule applies only to a purchase money security interest in consumer goods.

A security interest may not be created in chattel paper.