Exam 30: Secured Transactions

A(n) ______ is a transaction in which the payment of a debt is guaranteed by personal property owned by the debtor.

Everett buys a new bicycle on credit from Bicycle City. Bicycle City has a security agreement establishing a purchase-money security interest in the bicycle. Everett, however, discovers that he does not have enough money to pay his rent. Therefore, he sells his bicycle to his neighbor, Helen, who is unaware of Bicycle City's security interest in the bicycle. Everett fails to make payments on the bicycle and Bicycle City seeks to repossess it. Discuss the rights and obligations of the parties.

Which of the following was the result in the case in the text In re Girolamo Afonica, the case in which a debtor's bankruptcy discharge was challenged by a bank that held a security interest in a vehicle that the plaintiff, without notice to the bank, transferred to a junk dealer because his ex-wife did not like it sitting in her driveway?

Which of the following is a writing that demonstrates a right to payment of money?

Which of the following is true if a buyer of a consumer good subject to purchase-money security interest later sells the good?

"Dry Cleaning." Molly wanted to start her own dry cleaning business. She borrowed $50,000 from ABC Bank. She used her car and home as collateral and also gave ABC Bank an interest in any property she acquired after the security interest was made. The bank perfected its interest. Molly purchased a new computer from XYZ Electronics for use in her business. XYZ obtained a purchase money security interest on the computer. Molly was having problems with cash flow and failed to make payments to XYZ Electronics on the new computer. After the sale and before Molly stopped making payments, XYZ had filed a financing statement. The electronics store sought to repossess the computer, but the bank opposed that. Molly's business picked up and she was able to completely repay her loan to the bank and to XYZ. She requested that the bank discontinue its security interest, but the bank did not do so as requested by Molly, and still had not done so 45 days after Molly had paid off the loan and requested that the bank terminate its interest. -What should the bank have done to terminate its interest in any property of Molly?

"Overextended Debtor." For his home, Dennis purchased a big screen television from ABC Electronics and financed the purchase through ABC Electronics. Later, because Dennis had bought a boat, a new car, an expensive engagement ring for his girlfriend, and some other items, he was unable to continue making payments on the television. The manager from ABC Electronics called 60 days after the sale and asked Dennis to return the television. Dennis refused on the basis that ABC Electronics never perfected its interest in the television. He also explained that he had later granted a secured interest in the television along with his other goods to XYZ Credit in return for a loan. No financing statement was filed on behalf of ABC Electronics although XYZ Credit, with no knowledge of any interest of ABC Electronics, did file a financing statement. -Which of the following is the term for the type of agreement Dennis had with ABC Electronics?

"Dry Cleaning." Molly wanted to start her own dry cleaning business. She borrowed $50,000 from ABC Bank. She used her car and home as collateral and also gave ABC Bank an interest in any property she acquired after the security interest was made. The bank perfected its interest. Molly purchased a new computer from XYZ Electronics for use in her business. XYZ obtained a purchase money security interest on the computer. Molly was having problems with cash flow and failed to make payments to XYZ Electronics on the new computer. After the sale and before Molly stopped making payments, XYZ had filed a financing statement. The electronics store sought to repossess the computer, but the bank opposed that. Molly's business picked up and she was able to completely repay her loan to the bank and to XYZ. She requested that the bank discontinue its security interest, but the bank did not do so as requested by Molly, and still had not done so 45 days after Molly had paid off the loan and requested that the bank terminate its interest. -Which of the following is true regarding the effect of XYZ Electronics filing a security interest?

How long does a debtor have in which to object to a secured party's retention of collateral to satisfy a debt?

Which of the following is true regarding a secured party's interest in proceeds?

Which of the following is true regarding what may constitute collateral?

Which of the following is an interest in personal property or fixtures which secures payment or performance of an obligation?

"Overextended Debtor." For his home, Dennis purchased a big screen television from ABC Electronics and financed the purchase through ABC Electronics. Later, because Dennis had bought a boat, a new car, an expensive engagement ring for his girlfriend, and some other items, he was unable to continue making payments on the television. The manager from ABC Electronics called 60 days after the sale and asked Dennis to return the television. Dennis refused on the basis that ABC Electronics never perfected its interest in the television. He also explained that he had later granted a secured interest in the television along with his other goods to XYZ Credit in return for a loan. No financing statement was filed on behalf of ABC Electronics although XYZ Credit, with no knowledge of any interest of ABC Electronics, did file a financing statement. -Which of the following is correct regarding the statement of Dennis that the security interest of ABC was not perfected?

Which of the following is not an example of a good?

Perfection of a security interest in a motor vehicle generally occurs when the secured party files the interest with the state's Department of Motor Vehicles.

Under the UCC, a buyer in the ordinary course of business can take goods free of any security interest created by the seller of the goods unless the security interest is perfected.

Which of the following is true regarding the manner in which a secured party may sell collateral?

When ______ occurs, the creditor becomes the secured party who has a security interest in the collateral.

Which of the following is the agreement by which the debtor gives the secured interest to the secured party?

Which of the following is the proper designation under the UCC for the television?