Exam 25: Security Interests and Creditors Rights

If a debtor does not pay a mechanic's lien,the debtor's property can be sold to satisfy the debt.

In most situations,the state office in which a financing statement should be filed depends on the location of the collateral.

A buyer in the ordinary course of business has priority even if a previously perfected security interest exists as to the goods.

Capital Projects,Inc.,files a financing statement to provide no-tice of its security interest in the property of Data Network Corporation. The initial effective term of a financing statement is a period of

A creditor's surrender of collateral to a debtor without the guarantor's consent can reduce the guarantor's obligation.

Attachment gives the creditor an enforceable security interest in the collateral.

Federal law alone governs garnishment actions.

Kayla's Auto Sales borrows money from Lenders Finance Corporation under a security agreement. With the money,Kayla'sbuyssixMiatas. The Miatas are

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

Perfection is usually accomplished without filing a financing statement.

Once default has occurred and the secured party has obtained possession of the collateral,the secured party has no more options.

Bertram,Chaka,and Dougal are co-sureties of Erica's debt to Finance Loan Company. Bertram pays Erica's entire debt. Bertram's right to seek proportionate pay-ments from Chaka and Dougal is the right of

Jay is a surety for Karen's loan from Little Bank. Jay's right to be reim-bursed by Karen after having paid her debt is the right of

Market Credit Corporation is the secured party in a secured transaction with Northwest Outfitters. Market Credit could also be referred to as

The payment of Allen Janitorial Service's debt to Business Finance,Inc.,is guaranteed by Allen's personal property. Business Finance is

The payment of Eden Valley Farm's debt to First County Bank is guaranteed by Eden's personal property. This property is

A guarantor can be required to pay an obligation only after the principal debtor defaults.

Frances 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 in-terest,the bank must file its financing statement with

Petro Oil Refinery asks Quality Bank for a loan to increase its oil inventory. Quality requires Robin,Petro's president,sign a personal guaranty to pay the debt if Petro defaults. Meanwhile,to sell fifty barrels of refined oil to Slick Lubricants,Inc.,Petro asks its outside accountant Tina to co-sign a credit application. -Refer to Fact Pattern 25-1.If Robin is a guarantor,then the guaranty is required to be in writing because of

If a creditor wins a judgment against a debtor and the debtor will not or cannot pay the amount due,the dispute is at an end.