Exam 32: Secured Transactions

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?​

A security interest cannot be perfected without the filing of a financing statement.

The concept of a floating lien applies to a constantly changing inventory.

Quotient Financial Corporation is a secured party with a security interest in property owned by Retail Sales Company.Perfection of this security interest may not protect Quotient Financial against the claim of 

City Bank's financing statement in collateral owned by Delta Bottled Waters Corporation will expire in less than a year.Filed timely,a continuation statement could extend the effectiveness of the financing statement for 

Secured transactions are governed by the Uniform Commercial Code (UCC).

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

Fact Pattern 32-1General Leasing Company (GLC) buys equipment for use as inventory, borrowing $1 million from Helpful Finance Corporation for a security interest in the equipment. The next day, GLC borrows $500,000 from Interstate Bank, also for a security interest in the equipment. GLC defaults on the loans. -Refer to Fact Pattern 32-1.Suppose that Helpful perfects its security interest when GLC takes possession of the equipment.In that circumstance,the party with priority to the collateral on GLC's default would be 

Jones lives in Illinois,but works in Indiana.Jones borrows $1,000 from Heartland Bank,using her car as collateral.To perfect its security interest,the bank must file its financing statement in at least 

When more than one party claims an interest in the same collateral,a perfected secured party's interest has priority over the interest of most other parties.

Khalil holds a security interest in inventory owned by Luc.Khalil protects his claim to the inventory in the event of Luc's default by 

The payment of Olinda's debt to Pari is guaranteed by Olinda's personal property.Pari is most likely to perfect her interest by 

Sally is the secured party in a transaction with Lilly,who is the debtor.Sally files a financing statement with the appropriate state official.The financing statement must contain 

Any breach of the terms of the security agreement can constitute default. 

To create an enforceable security interest,the secured party must give something of value to a debtor's other creditors.

On default,a secured party who chooses not to retain the collateral must dispose of it in a commercially reasonable manner.

Fiona borrows $1,000 from Garden State Bank,using her recreational vehicle (RV)motor home,which she purchased at Hugo's RV Sales & Service,as collateral.To perfect its security interest,the bank must file its financing statement with 

The method of perfecting a security interest does NOT depend on the classification of the collateral.

Proceeds consist of whatever is received when collateral is sold.

Lenders Bank files a financing statement regarding a transaction with Metro Construction Company.To be valid,the financing statement must contain all of the following except