CH 29 LAW

To be valid, a financing statement does not need to contain a description of the collateral. (T/F)

FALSE

When 2 secured parties have perfected security interests in the same collateral, generally the most recent to perfect has priority. (T/F)

FALSE

A debtor can exercise a right of redemption only after a secured party has disposed of the collateral. (T/F)

FALSE

A financing statement is not effective if it is filed electronically. (T/F)

FALSE

A secured creditor's right to proceeds exists for only 10 days after the debtor's receipt of the proceeds. (T/F)

FALSE

A secured party can release the collateral described in a financing statement at any time. (T/F)

TRUE

A security agreement determines most of the parties' rights and duties concerning the security interest. (T/F)

TRUE

Attachment gives a creditor an enforceable security interest in collateral. (T/F)

TRUE

Default occurs when a debtor fails to repay the loan for which his or her property served as collateral. (T/F)

TRUE

When a secured debt is paid, the secured party does not need to file a termination statement in all cases. (T/F)

TRUE

United Sale Company is incorporated in Virginia, with its CEO office in the state of Washington. Using its equipment as collateral, United borrows $5,000 from Zip Credit, Inc. To perfect its security interest, Zip needs to file its financing statement in...

Virginia only.

Denny owns Eaters Cafe, which he uses as collateral to borrow $10,000 from First State Bank. To be effective, the security agreement must include...

a description that reasonable identifies the collateral and Denny's signature.

Dependable Corporation asks Eagle Company to agree to a security agreement that provides for coverage of the proceeds from the sale of after-acquired property. This is...

a floating lien.

Great Trucks, Inc. (GTI), repossesses a truck (not a consumer good subject to a purchase-money security interest) from Highway Transport company, and decides to keep it instead of reselling it. GTI sends written notice of this intent to the debtor. GTI must also send notice to...

any junior lien claimant who has file a statutory lien or security interest and any secured party from whom GTI has received notice.

Dandy Electronics Stores sell consumer products. To create a purchase-money security interest in a computer bought by Elmo, Dandy must...

extend credit for part or all of the purchase price of the computer.

Quick Credit, Inc., has a security interest in the proceeds from the sale of collateral owned by retail Stores Company. This interest may remain perfected for longer than 20 days after Retail receives the proceeds...

if a filed financing statement covers the proceeds or the proceeds are identifiable cash proceeds.

Storage Warehouse, Inc. (SWI), buys a forklift, but does not make a payment on it for 5 months. The seller, Tool & Equipment Company (T&E), repossesses it by towing it from a public street. SWI sues T&E for breach of the peace. Able will likely...

not prevail because T&E's repossession was not a breach of the peace.

Careful Credit Corporation files a financing statement regarding a transaction with Design Services Company. To be valid, the financing statement must contain all of the following except...

the reason for the transaction.

Safe-T Loans, Inc., wants to perfect its security interest in collateral owned by Tech Products Corporation. Most likely, Safe-T should file a financing statement with...

the secretary of state.

Luke borrows $5,000 from Modern Financial Corporation (MFC), which files a financing statement on May 1, but does not sign a security agreement until he receives the funds on May 5. Luke also borrows $5,000 from National Bank, which advances funds, files a financing statement, and signs a security agreement on May 2. Luke uses the same property as collateral for both loans. On Luke's default, in a dispute over the collateral, MFC will...

win because MFC filed first.