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Secured Transactions (Perfecting a Security Interest (Filing a financing…
Secured Transactions
Perfecting a Security Interest
Secured Party takes possession of the collateral (Pawn Shop)
Secured party has control over the collateral (Bank - account)
Filing a financing statement (filing must be authorized)
Financing Statement
Debtor's name
Collateral (may be suer-generic)
Secured party's name
Security Agreement can be filed as a financing statement (more detail is required)
Automatic
PMSI in
consumer
goods
Temporary
Proceeds (generally 20 days)
delivery of the collateral to the debtor
Movement of the debtor or collateral to another state
New value given (20 days)
Vehicles: Perfection ONLY occurs by notation on fthe certificate of title
Creating a Security Interest
Attachment
Debtor has rights in the collateral
Parties agree to create a security interest
Security agreement
reasonably identifies the collateral (cannot be super-generic)
authenticated by the debtor
record (tangible/retrievable medium)
secured party possesses or controls the collateral (the debtor gives the colllateral to the secured party to keep until the debt is paid off) - Pawn Shop
Secured party gives value
What the interest attaches to
after-acquired collateral, if identified
an after-acquired clause is not effective for consumer goods unless the debtor acquires them w/i 10 days of the secured party giving value
Identifiable proceeds
the collateral
Special cases: PMSI
The secured party gave value to the debtor who used the value to acuire the goods or rights therein, and the debtor used it for that purpose (car loan from a bank)
The secured party sold goods to the debtor and incurred an obligation to pay the secured party all or part of the purchase price (Big Box store sells a computer on credit)
Priorities
First to file or perfect
PMSI has priority over non-PMSI
PMSI in goods (other than inventory or livestock) prevails over ll other security interests if perfected w/i 20 days after debtor receives possession of the collateral
PMSI v. PMSI - first to file or perfect
PMSI lender v. Seller - seller has priority over the lender
PMSI priority extends to identifiable cash proceeds if PMSI is perfected when teh debtor receives possession of the inventory AND the PMSI secured party notifies teh holder of the conflicting security interest
PMSI priority in goods extends to identifiable proceeds if the PMSI is perfected when debtor receives possession or 2/i 20 days after
Default