Term
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Definition
| applies to consensual security interests in personalty (goods) or fixtures (NOT real estate) |
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Term
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Definition
when creditor creates legally enforceable interest in debtor's collateral; requires:
V-value
C-contract (i.e., security agreement)
R-rights in the collateral (debtor's) |
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Term
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Definition
putting world on record notice of interest's existence
attaining:
1. secured party taking collateral
2. automatic perfection for purchase money security interests in consumer goods
3. file financing statement (debtor's and creditor's names and addresses and description of collateral) with SoS in state where debtor located (principal residence or laws under which organized) except timber, minerals, or fixtures are filed in local county |
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Term
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Definition
generally, 1st to perfect takes 1st;
superior claimants entitled to full satisfaction before subordinate claimants take |
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Term
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Definition
| when debtor defaults on debt/obligation, article 9 lender has statutory and judicial remedies available; defined by contract |
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Term
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Definition
| classified by debtor's primary use; includes consumer goods, equipment, inventory, farm products, and fixtures |
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Term
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Definition
| stocks, bonds, mutual funds, proceeds from sale of collateral, accounts (i.e., rights to payment), promissory notes |
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Term
| floating lien (after-acquired collateral clauses) |
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Definition
| enforceable; "whether now held or hereafter acquired" |
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Term
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Definition
1. buyer in ordinary course (purchaser from merchant's inventory)
2. perfected attached creditor
3. lien creditor (judicial lien on the collateral)
4. non-ordinary course buyer (purchaser of collateral outside stream of commerce)
5. attached unperfected creditor
6. general unsecured creditor (did not take collateral) |
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Term
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Definition
| early filing allowed, even at onset of loan negotiations; if early filer subsequently attaches, attachment relates back to early filing date |
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Term
| after-acquired collateral financier v. purchase money security interest |
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Definition
equipment: PMSI can gain priority of AACF by filing properly within 20 days after debtor takes possession of the collateral
inventory: PSMI can gain priority by filing properly before debtor takes possession AND notifying AACF before debtor takes possession |
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Term
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Definition
-permissible so long as creditor does NOT breach the peace (i.e., conduct likely to cause violence)
-repossession over ANY debtor protest is breach of peace
-repossessor may NOT enter debtor's home without voluntary and contemporaneous consent |
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Term
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Definition
| secured party may obtain judicial writ of replevin ordering sheriff to respossess |
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Term
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Definition
-creditor lawfully retains collateral in full satisfaction of the debt still owed
-consumer goods: must send written notice to debtor and secondary obligors (i.e., guarantors of the debt like co-signers); NOT allowed if debtor has paid 60% (secured party must sell within 90 days)
-NOT consumer goods: notice sent to debtor and other secured parties, perfected creditors, and secondary obligors
-notified parties may object within 20 days, thereby forcing sale of collateral |
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Term
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Definition
-secured party applies proceeds to debt
-secured party chooses whether public (he may buy it) or private sale (cannot buy without external market checks)
-must be commercially reasonable
-reasonable notice required before sale |
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Term
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Definition
-secured party can seek remainder of debt when collateral sale nets less than debt
-but, if price low for inside buyer, price will be that which an independent 3rd party would have paid |
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Term
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Definition
-debtor's right to redeem is cut off once secured party has resold the collateral or completed a strict foreclosure
-debtor must pay missed payments, accrued interest, and reasonable expenses (including attorney's fees)
-acceleration clause will require debtor to pay off entire debt, interest, and expenses |
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