SECURED TRANSACTION: BAR CHECKLIST

GENERAL DEBTOR-CREDITOR RELATIONSHIPS

1) Creditor must et ! "ie# $% &ro'ess o( e)e'utio# *+udme#t)
,) E)'e&tio#s
!) St!tutor% "ie#s *'o#stru'tio# "ie#s !#d !rtis!#-s "ie#s)
$) Co#se#su!" Areeme#ts *mort!es !#d Art. / Se'urit% I#terests i# Perso#!" Pro&ert%)
UCC ARTICLE /
1) Att!'0me#t *Se'ured &!rt%-s ri0ts i# 'o""!ter!" !s !!i#st t0e de$tor)
!) T0ree Re1uireme#ts
i) Value i2e# *!#% de$t)
ii) De$tor 0!s rights i# t0e 'o""!ter!"
iii) Se'urit% agreement 're!ted
$) E2ide#'e o( Se'urit% Areeme#t *St!tute o( 3r!uds)
i) Areeme#t !#d 'reditor 0!s possession o( t0e 'o""!ter!" *I3 value 0!s $ee# i2e# !#d
de$tor 0!s rights4 o#'e 'reditor &ossesses t0e 'o""!ter!"4 0e 0!s !tt!'0ed and perfected)
ii) Areeme#t i# !# Authenticated Record *si#ed 5riti#)
') Aut0e#ti'!ted Re'ord
i) Des'ri&tio# o( Co""!ter!" : Reasonably identifies t0e 'o""!ter!" *NO SUPERGENERIC
DESCRIPTIONS su'0 !s 6!"" de$tor-s !ssets7&ro&ert%)
ii) Language i#di'!ti# t0!t t0e 'o""!ter!" des'ri$ed is security for a debt *#o m!i' 5ords
#eeded)
iii) Se'urit% i#terest !tt!'0es to after-acquired collateral $% !reeme#t *6!"" de$tor-s
e)isti# !#d !(ter-!'1uired e1ui&me#t)
i2) Se'urit% i#terest !tt!'0es to identifiable proceeds
2) Areeme#t '!# &ro2ide (or future advances
d) Ge#er!" Ru"es
i) De$tor '!# tr!#s(er ri0ts to t0e 'o""!ter!" *i.e.4 se""4 r!#t !#ot0er se'urit% i#terests4 et'.)
ii) T%&i'!""%4 t0e se'urit% i#terest (o""o5s t0e 'o""!ter!" e2e# i( t0e de$tor dis&oses o( it unless
Creditor !ut0ori8ed t0e de$tor to tr!#s(er (ree o( t0e se'urit% i#terest
iii) Ge#er!""%4 t0e orii#!" se'ured &!rt% 5i#s except as provided by the priority rule *see
$e"o5)
,) Per(e'tio# *Se'ured &!rt%-s ri0ts !!i#st 9d &!rties) *Att!'0me#t must $e est!$"is0ed $e(ore %ou
'!# &er(e't)
!) Per(e'tio# $% (i"i# ! financing statement i# t0e o((i'e o( t0e se'ret!r% o( st!te
i) :0!t;
*1) De$tor-s #!me *mi#or errors OK< i( de$tor '0!#es 0is #!me4 it-s serious"% mis"e!di#
!#d %ou #eed to (i"e #e5 3S)
*,) Se'ured &!rt%-s #!me
*9) I#di'!tio# o( t0e 'o""!ter!" *su&ere#eri' OK)
ii) :0ere;
*1) I#di2idu!"s : st!te o( de$tor-s &ri#'i&!" reside#'e
*,) Or!#i8!tio#s
*!) Pri#'i&!" &"!'e o( $usi#ess
*$) I( more t0!# o#e4 i# t0e '0ie( e)e'uti2e o((i'e
1
iii) Authorized by debtor i# !# !ut0e#ti'!ted re'ord *i( t0ere-s ! se'urit% !reeme#t4 it-s
!ut0ori8ed)
$) Per(e'tio# $% Possession o( Co""!ter!"
i) T!#i$"e oods
ii) C0!tte" &!&er
iii) Neoti!$"e i#strume#ts
') Per(e'tio# $% Control *i#2estme#t &ro&ert%4 de&osit !''ou#ts4 e"e'tro#i' '0!tte" &!&er4 "etters
o( 'redit)
d) Autom!ti' Per(e'tio#
i) P=SI i# consumer goods
ii) P=SI is *1) mo#e% "e#t to t0e de$tor to $u% t0e !'tu!" 'o""!ter!" or *,) se""er (i#!#'i#
iii) Co#sumer oods: &erso#!"4 (!mi"%4 or 0ouse0o"d use
e) Tem&or!r%
i) ,> d!%s (or proceeds
ii) Be%o#d ,> d!%s
*1) 6S!me o((i'e? Ru"e *&ro'eeds 'ou"d $e (i"ed i# t0e s!me o((i'e !s orii#!" 'o""!ter!")
*,) Ide#ti(i!$"e cash &ro'eeds
*9) Creditor &er(e'ts 5it0i# t0e ,>-d!% tem&or!r% &eriod *(i"i#4 &ossessio#4 et'.)
iii) our months !(ter de$tor re"o'!tes i( de$tor-s "o'!tio# o2er#s &er(e'tio#
9) Priorities *=ore t0!# o#e 'reditor 0!s ri0ts i# t0e de$tor-s 'o""!ter!" !(ter de$tor de(!u"ts)
!) Ge#er!" Ru"es
i) Bet5ee# u#&er(e'ted se'ured &!rties: (irst to attach
ii) Bet5ee# &er(e'ted !#d u#&er(e'ted: &er(e'ted se'ured &!rt% 5i#s
iii) Bet5ee# t5o &er(e'ted se'ured 'reditors: (irst to file or perfect
i2) Pur'0!se =o#e% Se'urit% I#terests 0!2e superpriority
$) P=SI i# I#2e#tor% 5i#s I3:
i) Per(e'ted 50e# de$tor ets &ossessio# o( i#2e#tor% and
ii) Noti'e to &rior 'reditors
') P=SI i# E1ui&me#t 5i#s I3:
i) Per(e'ted $e(ore or 5it0i# ,> d!%s !(ter de$tor ets &ossessio# o( t0e e1ui&me#t
d) Co#("i'ti# P=SI
i) I( t0e P=SI is se""er (i#!#'i#4 se""er 5i#s
ii) Ot0er5ise4 (irst to file or perfect 5i#s
e) Pur'0!ser o( C0!tte" P!&er
i) Good (!it0 &ur'0!ser o( '0!tte" &!&er t!@es &riorit% o2er &ro'eed i#terests i# t0e '0!tte"
&!&er !#d !#% ot0er se'urit% i#terest i# t0e '0!tte" &!&er i( &ur'0!sed 5it0out @#o5"ede o(
!#% 2io"!tio# o( t0e se'ured &!rt%-s ri0ts
() Bu%ers
i) Reu"!r $u%er t!@es (ree o( ! se'urit% i#terest i( 0e i2es 2!"ue !#d re'ei2es de"i2er%
5it0out @#o5"ede o( t0e se'urit% i#terest !#d before perfection
ii) Bu%er i# t0e ordi#!r% 'ourse o( $usi#ess t!@e (ree even if perfected i(
*1) Bu%er $u%s i# t0e ordi#!r% 'ourse o( se""ers $usi#ess
*,) Se""er *de$tor) is e#!ed i# t0e $usi#ess o( se""i# oods o( t0!t @i#d
*9) Bu%er 0!s #o @#o5"ede t0!t t0e s!"e violates t0e se'ured &!rt%-s ri0ts *$u%er '!#
@#o5 !$out t0e se'urit% !reeme#t)
iii) Co#sumer to Co#sumer S!"es *E..4 %!rd s!"es): Bu%er t!@es (ree even if perfected i(:
,
*1) Bu%er 0!s #o @#o5"ede o( t0e se'urit% i#terests
*,) Gi2es 2!"ue
*9) Goods !re 'o#sumer oods
*A) Be(ore se'ured &!rt% (i"ed
) Lie# Creditors
i) Ge#er!" ru"e : "ie# 'reditors $e!t u#se'ured 'reditors
ii) E)'e&tio#s : Se'urit% i#terest $e!ts "ie# 'reditor if
*1) Se'ured &!rt% is perfected before t0e "ie# !tt!'0es or
*,) Se'ured &!rt% files (irst and meets o#e o( t0e !tt!'0me#t re1uireme#ts *2!"ue i2e#<
!reeme#t or de$tor 0!s ri0ts)
0) B!#@ru&t'%
i) Per(e'ted se'ured 'reditors $e!t t0e trustee i# $!#@ru&t'%
ii) U#&er(e'ted se'ured 'reditors "ose to t0e trustee i# $!#@ru&t'%
A) Ri0ts o# De(!u"t
!) Re&ossessio#
i) A(ter de(!u"t
ii) C!##ot 6$re!'0 t0e &e!'e?
$) S!"e o( Co""!ter!"
i) Commer'i!""% re!so#!$"e
ii) Pri2!te or &u$"i'
iii) Noti'e o( t0e s!"e to de$tor or suret% *i( !&&"i'!$"e)
i2) Order o( Distri$utio#
*1) E)&e#ses
*,) Se'ured de$t is &!id
*9) Bu#ior "ie#s !#d i#terests !re &!id
*A) I( t0ere is ! sur&"us4 debtor gets the balance
*C) I( t0ere is ! de(i'ie#'%4 creditor can sue for deficiency
') Ret!i#i# t0e Co""!ter!" *Stri't 3ore'"osure)
i) Pro&osed to t0e de$tor
ii) A''e&t!#'e $% t0e de$tor or !'1uies'e#'e
iii) Com&"ete s!tis(!'tio#:
*1) 3u""% s!tis(ies t0e de$t
*,) Not !""o5ed (or 'o#sumer oods 50ere de$tor 0!s &!id D>E o( t0e se'ured de$t
i2) P!rti!" S!tis(!'tio# (or No#-'o#sumer oods
*1) P!rti!" s!tis(!'tio# o( t0e de$t
*,) De$tor is "i!$"e (or t0e $!"!#'e
*9) Not !""o5ed (or 'o#sumer oods
d) De$tor-s Ri0t o( Redem&tio#
i) A#% time $e(ore dis&ositio#
ii) P!% !"" o$"i!tio#s &"us re!so#!$"e e)&e#ses
e) 3!i"ure to Com&"% 5it0 t0e Code
i) Creditor is "i!$"e (or !'tu!" d!m!es
ii) Court &resumes t0!t t0e 2!"ue o( t0e 'o""!ter!" is &resumed e1u!" to t0e !mou#t o( t0e de$t
C) Suret%7A''ommod!tio# P!rt%
!) Suret% *!#s5ers (or t0e de$t o( !#ot0er) is "i!$"e to t0e e)te#t o( t0e o$"i!tio# 0e 'ommits to
&!%
$) S&e'i!" Ru"es
i) Suret% '!# !"5!%s re'o2er (rom t0e &rim!r% de$tor
9
ii) Suret% is su$ro!ted to !#% "ie# t0!t t0e &ri#'i&!" !2e to t0e &!%ee or se'ured &!rt%
iii) I( t0e 'reditor 0!s im&!ired t0e 'o""!ter!"4 suret%-s o$"i!tio# is redu'ed
i2) Suret% 0!s t0e s!me ri0ts u#der Art. / !s t0e &ri#'i&!" de$tor
A