SECURED TRANSACTIONS

SECURED TRANSACTIONS - SECURED TRANSACTIONS What is a...

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SECURED TRANSACTIONS
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What is a Secured Transaction? When a creditor makes a loan to a debtor in exchange for the debtor’s pledge of personal property as security. Article 9 of UCC Governs.
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Parties involved in Security Interests in Personal Property? Debtor Secured Party Collateral Security Interest
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Who is the Debtor? The party who owes payment!!
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Who is the Secured Party? The lender in whose favor there is a security interest.
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What is Collateral? The property subject to the interest.
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Types of Collateral: Consumer goods- are goods bought primarily for personal, family, or household use Equipment- are goods bought primarily for use in a business Farm Products- include crops, livestock and supplies used or produced in farming operations Inventory- are goods held sale, including work in progress and materials
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What is Security Interest? Security interest- an interest in personal property that secures payment or performance of an obligation.
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Formation of a Security Agreement Absent possession of the collateral, MUST have a WRITTEN Security Agreement! Valid Security Agreement MUST Include: 1. Clearly describe the collateral (so that it can be identified) 2. Contain the debtor’s promise to repay 3. Set forth the creditor’s rights upon default 4. Be SIGNED by the debtor
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Value Secured party must give VALUE to debtor Consideration sufficient to support a contract
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Valid Written Security Agreement Must Include: 1. Clear description of the collateral ( so that it can be identified) 2. Contain the debtors promise to repay 3. Set forth the creditors rights upon default 4. Be signed by the debtor
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Perfecting a Security Interest Establishes the right of a secured creditor against other creditors who claim an interest in the collateral
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Three Main Types of Perfection 1. Taking possession of the collateral 2. Automatic perfection 3. Filing a financing statement
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SECURED TRANSACTIONS - SECURED TRANSACTIONS What is a...

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