Exam 33: Secured Transactions in Personal Property

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

Self-help repossession of collateral upon a buyer's default is contrary to public policy and is never allowed.

Under Revised UCC Article 9, a financing statement must be signed by the debtor.

King Electronics, a retailer of video equipment, sold two DVRs to Larson, a psychologist, for use in her professional practice, which was located in her home.The sale to Larson was made on credit.King retained a security interest in the DVRs sold but did not file a financing statement.Mills, another creditor of Larson, has asserted that his lien on the two DVRs is superior to King's security interest.Is he right? As you decide, remember to classify the DVRs as collateral in the hands of King and Larson.

In a secured transaction, the person to whom the money is owed is secured party and the buyer is the debtor.

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?

Javier buys a 3D TV and a DVR from West Coast Sales.West Coast agrees to lend him 90 percent of the purchase price.Their agreement is known as a(n): ______.

A debtor may redeem collateral from the secured party at any time prior to sale or disposal by paying all legal costs and expenses incurred by the secured party.

In most states, __________ provides that a security interest in a non-inventory motor vehicle must be noted on the vehicle title registration.

An after-acquired property clause in a consumer security agreement means that a creditor has a lien in the shifting stock of goods of the debtor.

Generally, a secured creditor who has repossessed collateral may retain the collateral and cancel the debt.

_______, a form of possession under Article 9, occurs when a bank is able to require the debtor account holder to clear all transactions in that account.

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 needs to be perfected, regardless of whether there are competing claims for the collateral.

Claim in a changing or shifting stock of the buyer's goods is known as after-acquired goods.

A security interest is like a lien on personal property that allows the creditor to take possession of the property if the debtor defaults.

If the collateral is in the possession of the creditor: ______.

A purchase money security interest in consumer goods is automatically perfected without a creditor's filing or possession of the collateral.

A financing statement must provide all of the following except: _______.

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?