Asked by
Victoria Ayala
on Nov 21, 2024Verified
A purchase-money security interest is formed ________
A) when a debtor uses a credit card to buy collateral
B) when a bank attaches a debtor's account to the collateral
C) when a second debtor buys the collateral
D) when a debtor uses borrowed money from the secured party to buy the collateral.
E) when parties stipulate in a contract that they want a purchase-money security interest
Purchase-Money Security Interest
An interest in the property that secures payment or performance of an obligation where the property is purchased, giving the creditor rights in the purchased property.
Collateral
Assets or properties pledged by a borrower to secure a loan or obligation, ensuring the lender can recover the loaned funds in case of default by selling the collateral.
Debtor
is an individual or entity that owes money or an obligation to another party, known as the creditor.
- Comprehend the formation and priority of purchase-money security interests.
Verified Answer
SB
Learning Objectives
- Comprehend the formation and priority of purchase-money security interests.