Chapter 13 Credit Secured Transactions and Bankruptcy Credit

Chapter 13 Credit, Secured Transactions, and Bankruptcy

Credit Transactions n n Creditor – lender in a credit transaction Debtor – borrower in a credit transaction Unsecured Credit-does not require collateral to protect payment of debt Secured Credit-requires collateral to secure payment of loan 13 -2

Security Interest in Real Property n n Mortgage –real property used as collateral Mortgagor-owner/debtor Mortgagee-creditor Recording statutes 13 -3

Secured Transactions in Personal Property n n Personal property used as security Revised Article 9 of the UCC n n Governs Secured Transactions in personal property Security Agreement Floating Lien concept Perfecting a Security Interest 13 -4

Secured Transactions in Personal Property n n Buyer in Ordinary course of business Default and Remedies n n n Repossession Deficiency judgment Artisan’s lien 13 -5

Priority of Claims n n Secured vs. Unsecured Competing unperfected security interests Perfected vs. Unperfected claims Competing perfected security interests 13 -6

E-Secured Transactions n Financing statements to perfect a security interest in personal property may be in electronic form and filed and stored as an electronic record 13 -7

Surety and Guaranty n n Surety arrangement -Third party promise to be primarily liable Guaranty arrangement – third party promise to be secondarily liable 13 -8

Bankruptcy Courts and Procedure n n n Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 Types of Bankruptcy Procedure Automatic Stay Bankruptcy Estate 13 -9

Types of Bankruptcy n n Chapter 7 – Liquidation Chapter 11 – Reorganization Chapter 12 – Adjustment of Debts of family farmer or fisherman Chapter 13 – Adjustment of Debts of Individual 13 -10

Personal Bankruptcy n Chapter 7 – Liquidation and Discharge n n Debtors nonexempt property sold for cash Termination of legal duty to pay debts n n n Median Income Test Means Test Chapter 13 -Adjustment of Debts n n Plan of Payment Discharge 13 -11

Business Reorganization Bankruptcy n Chapter 11 – Reorganization n Plan of Reorganization n n Executory Contract or Unexpired Lease Automatic Stay Discharge Chapter 12 – Family Farmer and Family Fisherman Bankruptcy 13 -12