Exam 38: Secured Transactions and Suretyship

If Sharpe Finance Co.has a secured interest in Jeff's car and Jeff is in default, in most states, Sharpe may take the car from in front of Jeff's house without getting a court order.

A security interest is ineffective against the debtor until it "attaches."

The surety does not have the right of contribution from cosureties.

A bankruptcy trustee may invalidate a granting of certain security interests from the debtor if made on the date of or within 90 days before the filing of the bankruptcy petition.

Which of the following is a type of collateral involving rights evidenced by indispensable paper?

Under the Code, collateral is classified according to:

The right of a surety who has paid the creditor to be repaid by the principal debtor is:

Which of the following is true?

First Bank loaned $100,000 to Central Office Supply Store to purchase computers for its inventory.Central signed a financing agreement, which First Bank duly filed in the appropriate public office.Lynn came into Central's store and purchased a computer that was subject to the security interest held by First Bank.Assuming that Lynn is a buyer in the ordinary course of business, whose interest in the computer has priority?

The right of exoneration allows the surety to require the principal debtor to pay his obligation to the creditor.

Willton Bros.obtains from Marbowe Manufacturing a line of credit of $25,000, of which Willton initially uses $12,000 for purchase of inventory.Marbowe may only have a security interest in the inventory that covers the initial $12,000 advance.

A field warehouse, under Article 9 of the UCC, is:

"Value" is defined as including:

Karl loaned Linda $100,000.Madeline agreed to act as surety for $100,000.Nora agreed to act as surety for $75,000 and Orville agreed to act as surety for $25,000.Linda later defaulted on the loan, and Karl is now demanding payment from Nora and Orville.What amount do Nora and Orville have to pay? If Nora and Orville pay, does Madeline have any obligation? Explain.

Mary financed her TV at the bank, but is now delinquent on her payments.The bank holds a security interest in the TV.In most states, when Mary is not at home and without her knowledge, bank personnel may enter Mary's home to repossess the TV.

Dr.Wells purchased a refrigerator for use in storing medications at his office.The refrigerator will be classified as:

A defense that can only be asserted by the principal debtor is called a:

If the principal debtor defaults, the surety has rights against the principal debtor, third parties, and cosureties.These rights would include:

Steve defaults on a car loan secured by his car and guaranteed by both Sam and Dave.Subrogation would allow Sam, who paid Steve's full obligation to:

Hank's tractor is collateral for a loan and Hank moves to the next county.In most states, the security instrument must be re-filed in the proper county or it will render the security interest ineffective.