IKR Finance loaned $1,000 to Debtor. Debtor agreed to repay the $1,000 in one year, and one year, and Debtor signed a written security agreement granting IKR a security interest in an item of equipment owned by Debtor to secure this debt. IKR did not perfect the security interest. In this case:
| a. |
The security interest is attached. If Debtor defaults, IKR can repossess and sell the collateral. |
|
| b. |
The security interest has not attached because IKR does not have possession of the collateral. |
|
| c. |
The security interest has not attached because IKR did not give value. |
|
| d. |
The security interest has not attached because IKR failed to perfect the security interest. |
(a) The security interest is attached. If debtor defaults, IKR can repossess and sell the collateral (Ans)
Attachment of any security as an enforceable collateral takes
place when 3 conditions are satisfied
- Debtor has given a signed written security agreement (which
in this case debtor has given)
- Debtor has been given value against security (in this case,
it is $1000 loaned by IKR finance)
- Debtor has ownership or transferable rights in security (In
this case, it is said that item of equipment is owned by
debtor)
Since all 3 conditions are satisfied, therefore security interest is attached.
IKR Finance loaned $1,000 to Debtor. Debtor agreed to repay the $1,000 in one year, and one year, and Debtor signed a written security agreement granting IKR a security interest in an item of equipmen...
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