VA Bar Secured Transactions

Question 1

What is a security interest under Article 9 of the UCC?

Accepted Answer

An interest in personal property or fixtures that secures payment or performance of an obligation

Answer

A government bond

Answer

A type of insurance policy

Answer

An interest in real property only

Question 2

What are the requirements for attachment of a security interest?

Accepted Answer

Value given, debtor has rights in the collateral, and a security agreement authenticated by the debtor

Answer

Only a signed promissory note

Answer

Registration with the state secretary

Answer

A court order approving the security interest

Question 3

What is the purpose of filing a UCC financing statement?

Accepted Answer

To perfect the security interest and establish priority over other creditors

Answer

To create the security interest

Answer

To transfer ownership of the collateral

Answer

To notify the debtor of the debt amount

Question 4

What is a purchase money security interest (PMSI)?

Accepted Answer

A security interest in goods that secures the price of those goods or a loan used to purchase them

Answer

Any security interest created at the time of purchase

Answer

A government-guaranteed loan

Answer

An interest only in real estate purchases

Question 5

What happens to a security interest when the debtor defaults?

Accepted Answer

The secured party may repossess the collateral and either keep it or sell it to satisfy the debt

Answer

The security interest is automatically voided

Answer

The debtor must file for bankruptcy

Answer

The court must conduct a public auction

Question 6

What is the first-to-file rule in secured transactions?

Accepted Answer

Among perfected security interests, priority generally goes to the first to file or perfect

Answer

The first creditor to make a loan always has priority

Answer

Priority is based on the size of the debt

Answer

The most recent filing always takes priority