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What are requirements to create a security interest
- creditor must posses the collateral or a written security agreement signed by the debtor and reasonably identifying the collateral
- secured party must give value to the debtor
- debtor must have rights in the collateral
How to perfect a security interest
- filing a financing statement that contains the names and addresses of the secured party and the debtor, and is signed by the debtor
- a few types of security interests can be perfected without filing
Who has priority to collateral when more than one creditor claims rights in the same collateral
first security interest to be perfected
Remedies on the debtor's default
- repossess the collateral and retain it in part or full satisfaction of the debt
- sell or dispose of the collateral in any commercially reasonable manner.
- Judicial remedy
What are the three different types of liens?
- Mechanic's Lien
- Artisan's Lien
- Judicial Lien
Define mechanic's lien: a nonpossessory, filed lien on an owner's real estate for labor, services, or materials furnished for making improvements on the realty
define artisan's lien: a possessory lien on an owner's personal property for labor performed or value added
what are two types of judicial lien
- Writ of attachment: a court order to seize a debtor's nonexempt property prior to a court's final determination of the creditor's rights to the property.
- writ of execution: a court order directing the sheriff to seize (levy) and sell a debtor's nonexempt real or personal property to satisfy a court's judgment in the creditor's favor
a collection remedy that allows a creditor to attach a debtor's funds and property that are held by a third person (wages paid by an employer)
what is creditors' composition agreement
a contract between a debtor and his/her creditors by which the debtor's debts are discharged by payment of a sum less than the amount actually owed
Define Suretyship and Guaranty
a third person agrees to be primarily or secondarily liable for the debt owed by the principal debtor. a creditor can turn to his third person for satisfaction of the debt
What is exempt from creditors