NYLE NY Commercial Transactions & UCC 2 — Questions and Answers
Question 1: Under UCC Article 9 as adopted in New York, a security interest in most business personal property is perfected by filing a UCC-1 financing statement where?
- In the county clerk's office where the collateral is located
- With the New York Department of State
- With the New York Secretary of State's UCC Division (Correct answer)
- In the county where the debtor's principal place of business is located
Correct answer: With the New York Secretary of State's UCC Division
Under NY UCC Article 9, financing statements for most personal property collateral are filed centrally with the New York Department of State, Division of Corporations.
Question 2: Under New York's UCC Article 9, a purchase money security interest (PMSI) in consumer goods is perfected automatically without what?
- Giving notice to the debtor
- Filing a financing statement (Correct answer)
- Recording in the county where the goods are located
- Obtaining the debtor's written authorization
Correct answer: Filing a financing statement
Under UCC 9-309, a PMSI in consumer goods is automatically perfected upon attachment without the need to file a financing statement.
Question 3: Under UCC 9-322, when two secured creditors both have perfected security interests in the same collateral, priority generally goes to:
- The creditor whose interest attached first
- The creditor who first filed or perfected (Correct answer)
- The creditor with the higher dollar amount of debt
- The creditor who gave more recent value
Correct answer: The creditor who first filed or perfected
Under the first-to-file-or-perfect rule of UCC 9-322, priority among competing perfected security interests goes to the party who first filed a financing statement or first perfected.
Question 4: Under UCC Article 9, a UCC-1 financing statement lapses after how many years if a continuation statement is not timely filed?
- 3 years
- 4 years
- 5 years (Correct answer)
- 7 years
Correct answer: 5 years
A UCC-1 financing statement is effective for five years from the date of filing; a continuation statement must be filed within six months before lapse to maintain perfection.
Question 5: Under UCC Article 9, a debtor's right to redeem collateral from a secured party must be exercised before which event?
- The secured party sends a deficiency notice
- The secured party disposes of or enters into a contract to dispose of the collateral, or accepts the collateral in full satisfaction (Correct answer)
- 30 days after default
- The secured party obtains a judgment on the underlying debt
Correct answer: The secured party disposes of or enters into a contract to dispose of the collateral, or accepts the collateral in full satisfaction
Under UCC 9-623, a debtor may redeem collateral by tendering full payment of the secured obligation before the secured party has disposed of or contracted to dispose of the collateral, or accepted it in satisfaction.
Question 6: Under New York's UCC Article 9, which filing office handles financing statements for a debtor that is a business entity organized under New York law?
- The county clerk in the county of incorporation
- The New York Department of State (Correct answer)
- The New York Supreme Court clerk in the debtor's county
- The New York Department of Financial Services
Correct answer: The New York Department of State
For registered organizations formed in New York, UCC-1 financing statements are filed with the New York Department of State.
NYLE NY Commercial Transactions & UCC 2
Under UCC Article 9 as adopted in New York, a security interest in most business personal property is perfected by filing a UCC-1 financing statement where?