Exam 19: Secured Transactions

Joan borrows money from Jake under a security agreement.After borrowing the money,Joan buys a new kayak.The kayak is considered

Proceeds from the disposition of collateral after default on the underlying debt are distributed equally among lienholders who have made demands.

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

In most situations,a termination statement must be filed or sent within twenty days after the debt is paid.

The price that a secured party obtains on a sale of collateral is all that the creditor can recover on the debt.

The payment of Eden's debt to Flem is guaranteed by Eden's personal property.This property is

Fiona borrows $1,000 from Garden State Bank,using her motorcycle as col-lateral.To perfect its security in-terest,the bank must file its financing statement with

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

Future advances against a line of credit can be subject to the same collateral.

A security agreementmay provide for coverage of after-acquired property.

Attachment makes the security interest between a debtor and se-cured party ineffective.

The payment of Yves's debt to Zac is guaranteed by Yves's personal property.Their agreement identifies Yves's property by serial number.To establish Zac's interest,this is most likely

A secured party can release any col-lateral described in the financing statement,thereby terminating its security interest in that collateral.

On default,unless the security agreement states otherwise,the secured party has the right to take possession of the collateral.

A floating lien cannot apply to the proceeds of a sale of after-acquired property.

Hal's Hardware store defaults on a debt to Intrastate Bank,which takes possession of the collateral securing the debt.Intrastate sells the collat-eral.The proceeds from the sale are applied first to

Fact Pattern 19-1 General Leasing Company (GLC) buys equipment for use as inventory,borrow-ing $1 million from Helpful Finance Corporation for a security in-terest 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 19-1.Suppose that Helpful perfects its se-curity in-ter-est when GLC takes possession of the equipment.In that cir-cum-stance,the party with pri-ority to the collateral on GLC's default would be

To take goods free of any security interest,a buyer in the ordinary course of business cannot know about the interest.

A security interest is not enforceable after the creditor's rights have at-tached to the collateral.

Kathy is the secured party in a transaction with Julie,who is the debtor.The collateral is a 2007 Chevrolet F150 pick-up truck. Kathy files a financing statement in which she describes the collateral as "a vehicle." To perfect Kathy's interest this is