Texas Tech University
POLS 6420
WEEK 1 Vocabulary Debtor: is the owner, lessee, etc. who’s goods are used as collateral. (debtor owns the collateral) Obligor: the person who owes the debt to the creditor. (owes the debt) Lien: is an interest in the debtor’s property given by the law to protect a creditor. 2 types of liens 1. Lien = interest in the debtor’s property given by the law to
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Texas Tech University
POLS 6420
WEEK 1 Vocabulary Debtor: is the owner, lessee, etc. who’s goods are used as collateral. (debtor owns the collateral) Obligor: the person who owes the debt to the creditor. (owes the debt) Lien: is an interest in the debtor’s property given by the law to protect a creditor. 2 types of liens 1. Lien = interest in the debtor’s property given by the law to protect a creditor 2. Article 9 deals with consensual liens ( Consensual) a. Debtor voluntarily grants a lien; called a mortgage 3. Security Interest : consensual lien in personal property or fixtures 4. Nonconsensual a. Imposed against debtor’s property 5. Statutory Lien : a lien imposed by statute or common law in favor of certain creditors the law deems worthy of protection. i. Example → Mechanics lien (construction repairs), landlord Lien, artisan lien (mechanic repairs) b. A construction company may put a lien on a building in progress if it believes it is at risk of not being paid for its work. 6. Judicial/ judgement Lien : Lien arising from a judicial proceeding. ● Happens when you don’t pay the bills the creditor sues you and they get judgment in their favor and the sheriff is sent out to levy; the goods which they can seize the property/sell it to satisfy the judgment owed. Security Interest (SI): A consensual lien in personal property (governed by Article 9 (A9) of the UCC). Collateral : is the property subject to a security interest or agricultural lien. Pledge: the debtor (pledgor) gives physical possession of the collateral to the creditor (pledgee) until the debt is paid. Perfection : is when the creditor gives notice in order to make the transaction effective against other parties. (what the creditor must do to give notice making the transaction effective agasint other parties such as creditors, buyers, or a bakrupty trustee. It is the process by which the creditors security intrest becomes effective against most of the trest of the world. ) Levy: the legally sanctioned seizure and sale of property, or the money obtained from such a sale. Bankruptcy- 9-544(a)&(b)exam
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