Term
| Creditor Attachment (3) Elements |
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Definition
Value
Contract
Rights in Collateral |
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Term
| Collateral: Can be 5 Types |
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Definition
1. Consumer Goods
2. Equipment
3. Inventory
4. Farm Products
5. Fixtures |
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Term
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Definition
Something the secured party does to put the world on record or constructive notice of secured party's existence.
Perfection helps to protect the secured party from competitng creditors |
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Term
| 3 Ways to Attain Perfection |
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Definition
1. By secured party's taking possession of collateral
2. Automatic Perfection for Purchase Money Security Interests (PMSI)
3. Secured Party filed notice of security interest in public records. This is called the "financing statement" |
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Term
| What 3 elements are required for a filing statement? |
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Definition
1. Debtor's name and address
2. Creditor's Name and Address
3. Description of Collateral
FILE WITH SECRETARY OF STATE |
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Term
Hierarchy of Priorities
(5) |
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Definition
1. Buyer in the oridnary course of business
2. PMSI
3. Perfected Security Interests and Judicial Liens that have attached
a. Between perfected, first to file
b. Between Perfected & Judicial lien --> whichever came first
4. Unperfected Security Interests
5. Debtor |
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Term
| Post Default: Self-Help Repossession |
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Definition
1. Creditor can collect collateral as long as it doesn't "BREACH THE PEACE". <-- any violence or if debtor protests
2. If Creditor breaches the peace, criminal and civil sanctions attach |
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Term
| Post Default: Repossession by Judicial Action |
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Definition
| Secured party may get judcial writ ordering Sheriff to repossess secured collateral and deliver to secured party |
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Term
Post Default: Strict foreclosure
LIKELY TO BE TESTED |
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Definition
This is where creditor is in possession of the collateral.
He must then send notice of strict foreclosure to debtor, secondary obligors, and other secured parties.
IF ANY PARTY OBJECTS WITHIN 20 DAYS, CREDITOR MUST SELL COLLATERAL
If Debtor has paid 60+ % strict foreclosure not allowed |
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Term
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Definition
1. Secured party chooses public or private
2. Reaonable notice must be sent to debtor and secondary obligors (and perfected creditors is non-consumable goods)
3. Notice of sale must be commercially reasonable or 10+ days if non-consumer goods |
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Term
| Action for Deficiency Judgment |
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Definition
1. If sale doesn't satisfy debt, creditor can proceeds against debtor this way
2. If sale was to insider, the proceeds are what an indepedent buyer would have paid |
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Term
| Debtor's Limited Right of Redemption |
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Definition
1. Gone when collateral sold or strict foreclosure
2. Debtor must pay amount owed, missed payments, interest, and reasonable expenses (including attorney's fees) of creditor
3. Must pay everything if acceleration clause |
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