Exam 30: Secured Transactions

Any transaction in which the payment of a debt is guaranteed by personal property owned or held by the debtor is a secured transaction .

Best Feed Company and Countywide Loans Inc. each hold a security interest in property owned by Dairy Farm. Neither lender's interest is perfected. Priority between these security interests is generally determined by

The instrument normally filed to give public notice to third parties of a secured party's security interest is collateral .

Rolling Funds perfects a security interest in Steel Mill Inc.'s equipment by filing. When Steel Mill finally pays the debt, the debtor is entitled to the filing of

The last security interest to be perfected is the first in priority over any other perfected security interests.

To create an enforceable security interest between Finance Corporation and Global Trade Inc. in a written security agreement, the agreement must contain a description of

When more than one security interest has been perfected in the same collateral, they are entitled to proportionate shares in the value of the property, but neither has priority.

Retail Store Inc. can give Secure Loan Company a security interest in future inventory to be acquired by the debtor.

To obtain working capital, Mining Company puts up all of its equipment as security to borrow $100,000 from National Bank, which agrees to advance up to $100,000 more in the future. The bank properly perfects its security interest. To use the same collateral as security for a future advance, the bank must

To buy furniture, Gina, a consumer, signs a purchase agreement with Home Store, the seller, to pay $100 down and $50 per month until the price is paid. Home Store takes a security interest in the furniture. Because it was created as part of purchase agreement with a consumer, the security interest

An agreement that creates or provides for a security interest is referred to as

The legal process by which a secured party protects against the claims of third parties who wish to have their debts satisfied out of the same property of the debtor is perfection .

A secured party perfects a claim by filing a financing statement with the debtor.

Proceeds from the disposition of collateral after default on the underlying debt are distributed first to pay

Mobile Talk LLC sells phones. The phones are the collateral for a loan from Noble Bank to the seller. The parties agree to extend the UCC's automatic-perfection period for proceeds. In regard to the bank's interest in the proceeds, this agreement

When a debtor defaults, a secured creditor can relinquish the security interest but cannot then seek a judgment on the underlying debt.

A security interest can cover only property in which the debtor has present rights.

Credit Financing Inc. and Debt Lending Company hold security interests in property owned by Fleet Cartage Inc. Both lenders' interests are perfected. Priority between these security interests is generally determined by

Rico borrows funds from Suburban Bank secured by Rico's house. Rico defaults on the debt. The bank's options include

Sara needs $1,500 to buy textbooks and other school supplies. Tomas agrees to loan Sara $1,500, accepting as collateral Sara's car. They put their agreement in writing and sign it. Sara keeps possession of the car. Does Tomas have an enforceable security interest? How can Tomas let other creditors know of his interest in the car?