Exam 34: Secured Transactions in Personal Property

An after-acquired property clause in a consumer security agreement can cover only goods acquired by the debtor within thirty (30)days after the creditor gave value to the debtor.

Creditors receive an automatic 30-day temporary perfection in negotiable instruments taken as collateral.

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.

For a security interest to attach,the creditor must file a financing statement.

A buyer who buys goods from a debtor in the ordinary course of business is subject to a creditor's security interest but only if the interest was perfected and the buyer had notice of it.

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?

Under Revised UCC Article 9,a debtor may authorize a financing statement by acquiring the collateral that is subject to the security agreement.

Consumer goods are classified into different categories based on the debtor's intended use,not the physical characteristics of the goods.

A security agreement must:

_______ occurs when a bank is able to require the debtor account holder to clear all transactions in that account.

When there are two perfected secured creditors in the same collateral:

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

Attachment provides creditors with rights.

When the filing of a financing statement is defective:

Consumer goods are not subject to perfection of a security interest.

What is the purpose of a financing statement?

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

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

Creditors cannot legally request collateral on a previously unsecured loan.

If a breach of the peace might occur: