Asked by Brynn Lauman on May 20, 2024
Verified
Overextended Debtor.Dennis purchased a big-screen television from ABC Electronics and financed the purchase through ABC Electronics based on an agreement granting ABC Electronics a security interest in the television and requiring that Dennis make monthly payments.Three months later,Dennis was unable to continue making payments on the television because he had bought a boat,a new car,an expensive engagement ring for his girlfriend,and some other items.The manager from ABC Electronics called and asked Dennis to return the television.Dennis refused on the basis that ABC Electronics never perfected its interest in the television.Which of the following is the proper designation under the Uniform Commercial Code for the television?
A) It is a consumer good.
B) It is a pledge.
C) It is an allonge.
D) It is unsecured property.
E) It is both unsecured and unperfected property.
Security Interest
A legal claim or lien on assets or property, granted to secure the performance of an obligation or repayment of a debt.
Consumer Good
Goods produced and purchased for personal use, as opposed to those made for production or commercial use.
Perfected Interest
A legal status that gives a creditor priority over others in claiming collateral or property rights, typically involving a secured transaction that has been properly filed or recorded.
- Understand the exemptions available under federal bankruptcy law.
- Analyze the rights and obligations of parties involved in transactions secured by personal property.
Verified Answer
GJ
Garrett JoestMay 26, 2024
Final Answer :
A
Explanation :
According to Uniform Commercial Code Section 9-102(23),a consumer good is a good used or bought for use primarily for personal,family,or household purposes.When a creditor sells a consumer good to a debtor on a credit basis or a creditor extends a loan to a debtor for the purchase of a consumer good,the security interest in the good perfects automatically.
Learning Objectives
- Understand the exemptions available under federal bankruptcy law.
- Analyze the rights and obligations of parties involved in transactions secured by personal property.