Exam 20: Security Interest in Personal Property

The concept of the floating lien does not apply to future advances.

Consumer Credit Corporation loans $15,000 to Dave to buy a car,which is used as collateral to secure the loan.Dave pays less than half of the loan,before he defaults.What are the lender's alternatives?

To qualify as a commercially reasonable sale,a secured party's sale of col?lateral,after default and repossession,must be public.

Fact Pattern 20-1 (Questions 5-7 apply) Excel Vehicles,Inc. ,makes and sells automobiles to auto dealers,including Fine Auto Sales.Fine sells the cars to consumers and businesses. -Refer to Fact Pattern 20-1.Ira,a police officer,buys an Excel from Fine to drive in his off-duty hours.Ira's Excel is

Ron does not make a payment on his car loan for several months.The dealer,Star Auto,repossesses the car by towing it from a public parking lot.Ron sues Star for breach of the peace.Ron will probably

Verna,a debtor,and Wick,a creditor,sign a security agreement con?tain?ing a specific description of the collateral.Wick subsequently files a financing statement that contains a more general description.This description

A perfected security interest will always have priority over an unper?fected security interest in the same collateral.

A chair bought by a business office would be classified as a consumer good.

A financing statement's description of collateral as "all the debtor's as?sets" is sufficient to reasonably identify the property.

Filing a financing statement with the appropriate public office is the only way to per?fect a purchase-money security interest in consumer goods.

A continuation statement is effective only if it is filed within six months before the expiration of a financing statement.

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

A purchase-money security interest arises only when a buyer "pur?chases" goods with "money."

Fact Pattern 20-3 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 20-3.Suppose that Helpful perfects its se?curity in?ter?est when GLC takes possession of the equipment.In that cir?cum?stance,the party with pri?ority to the collateral on GLC's default would be

Pure Capital Corporation wants to perfect a security interest in a nego?tia?ble instrument owned by Quality Securities,Inc. ,and payable to Right Investment Company.This can be accomplished by

First Federal Bank wants to perfect its security interest in the property of Global Services Company.The most common method of perfecting a se?curity interest is for

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

Ed repays his debt,incurred to buy consumer goods,to First City Bank and immediately files a written request for a termination statement.First City

Eagle Capital Company and First National Bank are secured parties with security interests in property owned by Great Commercial Corpora?tion.Between these security interests,the first to be filed or perfected has prior?ity over other filed or per?fected security interests in

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