Exam 34: Secured Transactions in Personal Property

In a security agreement, the creditor and the debtor agree that the creditor has a security interest.

The steps in terminating a financing transaction upon full payment by the debtor include the preparation of a termination statement by the creditor and the presentation of the statement to the filing officer, who marks the record "terminated."

Grund, a night club performer, financed the purchase of a drum set to be used in his night club act. The collateral is classified as a consumer good.

A security interest gives a creditor more protection than is afforded by a right to sue on the debt.

The perfection obtained by filing a financing statement lasts for __________.

A security agreement must:

Mark purchased a very expensive automobile on credit. Within a week, Mark discovered that a tune-up was necessary, for he was in the habit of driving at an excessive rate of speed. When the car was repaired, the bill was more than $1,000. Mark does not have the money to pay for the car repairs or the monthly car payments. The credit company as well as the repair shop are concerned over who has priority of repayment. Who has priority and why?

A security agreement need not describe the collateral involved.

When the filing of a financing statement is defective:

A debtor has sufficient rights in the collateral for a security interest to attach only if the debtor owns the collateral.

The property that is subject to the security interest is called collateral.

A security interest is a property right that enables the creditor to take possession of the property if the debtor does not pay the amount owed.