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Worksheet 30.2: scope of a security interest & priorities & rights and duties of debtors and creditors & default
Terms in this set (18)
Property that a debtor acquires after a security agreement is executed
A security interest in collateral that is retained even when the collateral changes character classification or location
What is received when the collateral is sold or otherwise disposed of such as by an exchange
The use of an asset that is not the subject of a loan to collateralize that loan.
A floating lien is created by security agreement that provides for a security interest in the proceeds of the sale of collateral as well as in:
after-acquired property and future advances.
A creditor may not be interested in a specific pieces of property or inventory and so a __ lien may be used to continue the security interest even if the collateral changes. A security interest in collateral gives the secured party interest in the proceeds from the sale or other disposition of that collateral. Generally an after acquired property clause in a security agreement gives the secured party an __ in newly acquired __ that replaces old inventory that has been sold. Advances against a line of credit can be __ to a properly perfected security interest as well.
Floating, proceeds, interest, inventory, subject
T/F The general rule when more than one security interest has been perfected in the same collateral is that the first security interest to be perfected has priority
With regard to priorities on collateral __ security interest have the highest priority. If there are two or more conflicting __ security interest then the __ to perfect has priority. If there are conflicting __ security interest then the first to __ has priority
Perfected, perfected, first, unperfected, attach
A person who buys in the __ course of business takes the goods free of any security interest created by the seller even if the security interest is perfected. This persons buys in __ and without knowledge that the sale __ the rights of another in the goods being purchased. A perfected __ has priority over a conflicting security interest in the same inventory.
Ordinary, good faith, violates, PMSI
T/F A secured party can release all or part of any collateral described in the financing statement, thereby terminating its security interest in that collateral
T/F when a debtor has fully paid a debt, the debtor is entitled to have a termination statement filed if a UCC-1 was filed to perfect the security interest.
A judgment for any amount of debt that is not paid after collateral is sold
An action to carry into effect the directions in a court decree or judgment.
The obtaining of money by legal process through the seizure and sale of property, usually done after a writ of execution has been issued.
T/F Article 9 of the UCC accurately defines the terms default so that it is clear to parties involved in a secured transaction
On taking possession, the secured party may either __ the collateral or __ the goods and apply the proceeds toward the debt
Every aspect of the disposition of collateral by secured party must __
By commercially reasonable
Select the proper order of distribution of proceeds
Pay the expenses to sell the collateral, then pay off the debt, then give the surplus to the debtor