8-Secured Transactions

8-Secured Transactions - Secured Secured Transactions...

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Secured  Secured  Transactions Transactions
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Property Property Property  is divided into  2 classes in law  –  land or  real property  and all other property, called personal  property  which can be  tangible  (cars, television,  boats and so on) or  intangible  (share certificates,  bonds, cheques). All property has 2 aspects  that are important  considerations for security purposes: - Ownership - Possession Possession of an item does not  necessarily mean  there is a power to sell it with clear title.
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Several types of transactions Creditor obtains security The documents/instruments involved are called  Security Instruments   Collateral:  property of the debtor that can be  seized and sold if debt not paid.        Security Instruments  Security Instruments 
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Why take security? Why take security? Security on a debt offers a lender a quick  remedy if the borrower defaults, without  having to go to court for repossession of  the property . Creditors who have security for their loans  will be repaid before any other creditors,  provided that security has been registered .
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Security Security A security is created by giving the creditor 1st  claim against the assets used as security.   This  accomplished  in a unique way under the  Act and Viewed  in 3 stages : - 1) The Agreement; - 2) Attachment & - 3) Perfection. These steps often take place simultaneously .
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Agreement Agreement The  contract sets out the rights and  obligations between the parties and  designates the asset (such as a car) to be  used as security for a loan. The creditor (e.g. lender) has no claim  against the asset (e.g. A car), having  provided no actual benefit at this stage. 
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Attachment Attachment This takes place when value is given under the  contract to the debtor. At this point the creditor (the lender) obtains a 
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This note was uploaded on 02/01/2012 for the course ACF acc330 taught by Professor Hardy during the Spring '11 term at Seneca.

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8-Secured Transactions - Secured Secured Transactions...

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