Exam 20: Secured Transactions

On default, unless the security agreement states otherwise, the secured party has the right to take possession of the collateral.

Lena borrows from Mac and Nicol, using the same farm equipment as 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

Proceeds consist of whatever is received when collateral is sold.

Sally is the secured party in a transaction with Lilly, who is the debtor. Sally files a financing statement with the appropriate state official. The financing statement must contain

Jason is the creditor in a transaction with Carol, who is the debtor. Which of the following requirements is not necessary for Jason to have an enforceable security interest?

The failure to pay a debt as promised is known as default.

A debtor is the person in whose favor there is a security interest.

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

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

A financing statement must include a description of the collateral by type or item.

A financing statement cannot be the same as the security agreement.

Perfection refers to the quality of the collateral that secures a creditor's interest in a debtor's debt.

In most situations, a termination statement must be filed or sent within twenty days after the debt is paid.

A financing statement must include the creditor's signature.

The concept of a floating lien applies to a constantly changing inventory.

The person who owes the payment of a secured obligation is the secured party.

A financing statement is effective for five years from the date of filing.

The last security interest to be perfected is the first in priority over any other perfected security interests.

A security agreements may provide for coverage of after-acquired property.

The payment of Waldo's debt to Main Street Bank is guaranteed by Waldo's personal property. This is governed by