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Secured transactions are:
- Simply a debt secured by personal property (chattels)
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A Purchase Money Security Interest (PMSI) Creditor is:
- A creditor who advances money or credit to enable a debtor to obtain collateral and take a security interest in that collateral
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After acquired property clause
- Creditor takes as a collateral property to be acquired by debtor at later date
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3 Elements of Attachment (creation of secured agreement=
- - must have an Agreement between creditor and debtor
- - must have Value given by the creditor
- - Debtor must have Rights in the collateral
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Perfecting means:
- a creditor informing the public that he has dibs on a collateral
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No attachment after all 3 of these have occurred (3 ways to PERFECT):
- - perfect by Taking possession of the collateral (negotiable instruments, sticks and bonds)
- - Filing a financing statement (only way to take over AR)
- - by attachment (only for PMSI creditors in consumer goods, wins against all other creditors)
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A financing statement for perfecting must contain:
- - names and addresses of parties
- -general description of collateral
- - signature of debtor
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Two exceptions when a perfected creditor loses to a purchaser:
- - One who perfects by attachment loses to purchaser without notice
- - one who buys from a merchant in ordinary course of business takes free of all security interests, even if they had a notice of security interest
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A PMSI creditor can get priority over collateral by:
- - non inventory, filing within 20 days from the moment the debtor gets possession to the collateral
- - inventory, has to file and given written notice to creditors ahead of him, before debtor takes possession
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3 Remedies of a creditor after default:
- - Peacefully repossess the collateral and sell/lease it
- - Strict foreclosure
- - Sue debtor
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