Exam 24: Security Interests in Personal Property

A future advance against a line of credit must be of the same type as the original advance to be subject to the same collateral.

A security interest may attach to intangible collateral but cannot be perfected.

Computer World (CW),after repossessing a multimedia system from Dave,a consumer,decides to keep the system instead of reselling it.CW sends written notice to Dave.CW can now keep the system

Region Bank wants to perfect its security interest in timber owned by Superior Lumber,Inc.Most likely,a financing statement should be filed with

To create an enforceable security interest,the secured party must give value.

A security agreement must be filed in person to be valid and enforceable.

Quotient Financial Corporation is a secured party with a security interest in property owned by Retail Sales Company.Perfection of this security interest may not protect Quotient Financial against the claim of

For a creditor to have an enforceable security interest,the debtor must have title to the collateral.

A purchase-money security interest in consumer goods is perfected automatically at the time of a credit sale.

A financing statement is effective only if it is filed electronically.

Olaf is the creditor in a transaction with Phil.Once certain requirements are met,Olaf's rights will attach,which means that Olaf will have

Idle Investments,Inc.,and Harbor Bank are secured parties with security interests in property owned by GR8 Manufacturing Corporation.Priority between these security interests is generally determined by

A purchase-money security interest arises only when a seller provides a buyer with the "purchase money" to buy goods.

A secured party can release the collateral described in a filed financing statement only if the debtor has paid the debt.

Efrem owns Fans & Players,a retail sporting goods shop.When Great Hill Lodge,a new ski resort,is built in the area,Efrem decides to expand and borrows a large sum from Hometown Bank.The bank takes a security interest in Efrem's present inventory and any after-acquired inventory as collateral for the loan.The bank properly perfects the security interest by filing a financing statement.Efrem's business is profitable,and he begins doubling his inventory.A year later,an avalanche destroys the ski slope and lodge.Efrem's business takes a turn for the worse,and he defaults on his debt to the bank.The bank seeks possession of his entire inventory,even though the inventory is twice as large as it was when the loan was made.Efrem claims that the bank has rights to only half of his inventory.Is Efrem correct Explain.

Lena borrows from Mac and Nicol,using the same collateral for both loans.Only Nicol has a perfected security interest.Lena defaults on both loans.The party with first rights to the collateral is

Hal's Hardware store defaults on a debt to Intrastate Bank,which takes possession of the collateral securing the debt.Intrastate sells the collateral.The proceeds from the sale are applied first to

The payment of Eden's debt to Flem is guaranteed by Eden's personal property.This property is

Intermittent advances against a line of credit can be subject to the same collateral.

Mona lives in New Jersey,but she works in New York.Mona borrows $1,000 from National Bank,using her motorcycle as collateral.To perfect its security interest,the bank must file its financing statement in at least