Exam 34: Secured Transactions in Personal Property

When a security interest in property is inferior to other interests and claims to the property, it is said to be perfected.

Upon the debtor's default, the creditor may sell the collateral at a public or private sale, or lease it to a third party.

What is the purpose of a financing statement?

Generally, a secured creditor who has repossessed collateral may retain the collateral and cancel the debt.

A security interest that is effective against third persons as well as against the buyer is called a:

Under Revised UCC Article 9, a debtor may authorize a financing statement by acquiring the collateral that is subject to the security agreement.

For a security interest to attach, the creditor must file a financing statement.

Upon a default by a buyer, the secured seller may resell the collateral:

A debtor may redeem collateral at any time prior to the time that the secured party has disposed of the collateral or entered into a binding contract for resale by tendering the entire obligation that is owed plus any legal costs and expenses incurred by the secured party.

Which is not an element of attachment?

Perfection of a security interest takes place:

Attachment provides creditors with rights.

A secured transaction covers proceeds from the collateral unless such interest is expressly excluded.

King Electronics, a retailer of video equipment, sold two DVRs to Larson, a psychologist, for use in her professional practice, which was located in her home. The sale to Larson was made on credit. King retained a security interest in the DVRs sold but did not file a financing statement. Mills, another creditor of Larson, has asserted that his lien on the two DVRs is superior to King's security interest. Is he right? As you decide, remember to classify the DVRs as collateral in the hands of King and Larson.

If the collateral is in the possession of the creditor:

Consumer goods are not subject to perfection of a security interest.

UCC Article 9 makes a statutory lien for repairs or storage subordinate to a perfected security interest in the same collateral.

A(n) __________ statement is a document, which may be requested by a paid-up debtor, stating that a security interest is no longer claimed under the specified financing statement.

Under Revised UCC Article 9, a financing statement must be signed by the debtor.

Wellfix Corporation manufactures electric toasters and sells them to retail appliance stores. Which of the following statements is true?