Exam 34: Secured Transactions in Personal Property

A security agreement need not describe the collateral involved.

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

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

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

Collateral may change its form and character during the course of a security agreement.

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.

Claim in a changing or shifting stock of the buyer's goods is known as a floating lien.

When a security interest in property is inferior to other interests and claims to the property,it is said to be perfected.

Perfection of a security interest takes place:

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

A security interest needs to be perfected,whether or not there are competing claims for the collateral.

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

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

A debtor must have rights in the collateral for a security interest to attach.

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?

When a state statute requires a security interest in a motor vehicle to be noted on the certificate of title,the security interest is perfected:

A security agreement must be backed by a written record even if the creditor has possession of the collateral.

When a consumer gives a creditor a security interest in forthcoming health insurance proceeds,the creditor must file a statement with the insurance company in order to have a perfected security interest.

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

When a seller sells on credit and is given a security interest in the goods,that interest is called: