Exam 34: Secured Transactions in Personal Property

An interest in personal property or fixtures that secures payment or performance of an obligation is called a:

Morris made two purchases. He purchased his neighbor Cordelia's typewriter and a computer from Crazy Computers. Regarding the typewriter, Cordelia had bought it on credit from Jack's Typewriters. Cordelia had financed the purchase with Jack's and signed a promissory note and a security agreement covering the purchase. The creditor, Jack's, did not file a financing statement, relying on the concept of automatic perfection for purchase money security interests in consumer goods. Morris was unaware of the history of the typewriter. The computer was subject to a security interest in favor of Country Bank, which had perfected its security interest by filing. Morris, by coincidence, knew of this security interest when Morris purchased the computer. Unfortunately, neither Cordelia nor Crazy Computers paid the secured creditors who now seek to repossess the collateral from Morris. What will be the likely outcome of this case?

A security agreement must:

Goods held for sale or lease are:

Upon the debtor's default, the creditor may sell the collateral at a public or private sale, or lease it to a third party.

When the filing of a financing statement is defective:

The property that is subject to the security interest is called collateral.

Upon a default by a buyer, the secured seller may resell the collateral:

What is the purpose of a financing statement?

Attachment provides creditors with rights.

In a security agreement, the creditor and the debtor agree that the creditor has a security interest.

Wellfix Corporation manufactures electric toasters and sells them to retail appliance stores. Which of the following statements is true?

A security interest that is effective against third persons as well as against the buyer is called a:

Mark purchased a very expensive automobile on credit. Within a week, Mark discovered that a tune-up was necessary, for he was in the habit of driving at an excessive rate of speed. When the car was repaired, the bill was more than $1,000. Mark does not have the money to pay for the car repairs or the monthly car payments. The credit company as well as the repair shop are concerned over who has priority of repayment. Who has priority and why?

If the collateral is in the possession of the creditor:

The perfection obtained by filing a financing statement lasts for __________.

If two creditors have a security interest in the same collateral, their priority is determined according to the "last in-first out" provision.

A security interest is a property right that enables the creditor to take possession of the property if the debtor does not pay the amount owed.

A debtor may redeem collateral at any time prior to the time that the secured party has disposed of the collateral or entered into a binding contract for resale by tendering the entire obligation that is owed plus any legal costs and expenses incurred by the secured party.

Grund, a night club performer, financed the purchase of a drum set to be used in his night club act. The collateral is classified as a consumer good.