Exam 20: Secured Transactions

The payment of Paul's debt to Ryan is guaranteed by Paul's 2002 Honda Civic. Ryan filed the financing statement on July 1, 2012. If Ryan does nothing else, the financing statement will be effective until

A security interest is enforceable only if the collateral is in the secured party's possession.

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 office in which a financing statement should be filed depends on the creditor's location.

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

Clear Lake Credit Corporation lends funds to Donny, a consumer, to apply to the cost of a boat, which is the collateral for the loan. An enforceable security interest requires

Fact Pattern 20-1 General Leasing Company (GLC) buys equipment for use as inventory, borrow¬ing $1 million from Helpful Finance Corporation for a security in¬terest in the equipment. The next day, GLC borrows $500,000 from Interstate Bank, also for a security interest in the equipment. GLC defaults on the loans. -Refer to Fact Pattern 20-1. Suppose that two weeks after GLC takes possession of the equipment, Helpful and Interstate file financing statements, with Interstate filing first. In that circumstance, the party with priority to the equipment is

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

The payment of Hu's debt to Ian is guaranteed by Hu's personal property. To give notice of his interest in Hu's property to other creditors, Ian is most likely to

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

The payment of John's debt to Kirsten is guaranteed by John's personal property. Kirsten is most likely to perfect her interest by

The "first-in-time" rule means that an unperfected security interest takes priority over a perfected security interest.

A security interest cannot be perfected without the filing of a financing statement.

A secured party can release any collateral described in the financing statement, thereby terminating its security interest in that collateral.

The payment of Frida's debt to Gianini is guaranteed by Frida's personal property. Gianini is

The payment of Brian's debt to Chuck is guaranteed by Brian's personal property. This is

Secured transactions are governed by the Uniform Commercial Code (UCC).

To take goods free of any security interest, a buyer in the ordinary course of business cannot know about the interest.

Fact Pattern 20-1 General Leasing Company (GLC) buys equipment for use as inventory, borrow¬ing $1 million from Helpful Finance Corporation for a security in¬terest in the equipment. The next day, GLC borrows $500,000 from Interstate Bank, also for a security interest in the equipment. GLC defaults on the loans. -Refer to Fact Pattern 20-1. Suppose that Helpful perfects its security interest when GLC takes possession of the equipment. In that circumstance, the party with priority to the collateral on GLC's default would be

Sara needs $1,500 to buy textbooks and other school supplies. Tomas agrees to loan Sara $1,500, accepting as collateral Sara's car. They put their agreement in writing and sign it. Sara keeps possession of the car. Does Tomas have an enforceable security interest? How can Tomas let other creditors know of his interest in the car?