Security Agreements - Revision history

Drew Jackson at 16:00, 13 October 2018

2018-10-13T16:00:57Z

← Older revision		Revision as of 16:00, 13 October 2018
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	== Client problems==		== Client problems==
	* ~~Client~~ wants to know what a car dealer means when the dealer says it will take a “lien” over a car as part of a financing arrangement.		*Client wants to know what a car dealer means when the dealer says it will take a “lien” over a car as part of a financing arrangement.
	* Client is buying a used car and wants to be sure that there are no “liens” against the car.		*Client is buying a used car and wants to be sure that there are no “liens” against the car.
	* Client wants to know the difference between a sales agreement and a lease agreement for a car.		*Client wants to know the difference between a sales agreement and a lease agreement for a car.
	* Client is behind in car payments and wants to know their rights because the lender is threatening to repossess the car.		*Client is behind in car payments and wants to know their rights because the lender is threatening to repossess the car.
	* Client’s car was repossessed because of missed payments and the client wants to know if anything can be done about it.		*Client’s car was repossessed because of missed payments and the client wants to know if anything can be done about it.

	== Summary of the law==		== Summary of the law==

Drew Jackson at 19:13, 12 October 2018

2018-10-12T19:13:35Z

← Older revision		Revision as of 19:13, 12 October 2018
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	{{REVIEWEDPLS \| reviewer = [[Alison Ward]]\|date= August 2018}}{{Consumer and Debt Law TOC\|expanded = ~~mortgagesl~~}}		{{REVIEWEDPLS \| reviewer = [[Alison Ward]]\|date= August 2018}}{{Consumer and Debt Law TOC\|expanded = mortgages}}

	A '''security agreement''' documents an intention to grant another party a security interest in personal property to make sure a loan is paid back or a promise is kept.		A '''security agreement''' documents an intention to grant another party a security interest in personal property to make sure a loan is paid back or a promise is kept.

Drew Jackson: /* Priority of security interests */

2018-10-12T13:07:03Z

Priority of security interests

← Older revision		Revision as of 13:07, 12 October 2018
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	Here is an example of when a PMSI might be relevant:		Here is an example of when a PMSI might be relevant:

	</blockquote>“Bank C takes a security interest over all chattels (personal, moveable possessions) that a consumer owns now and might acquire in the future. (The ''Personal Property Security Act'' allows this type of agreement.) If the consumer owns household furnishings and one car now, and later buys a second car using cash, the second car becomes collateral under the Bank C security agreement. But, consider if the consumer only owned household furnishings when the security agreement with the bank was made. Suppose later the consumer wants to buy a car and does not have the cash to buy it. If a car dealership sells the consumer a car on credit, it will probably want security. (Or, if another creditor — such as a bank — gives the consumer a loan to buy the car, it too will probably want security.) When the car dealership searches the Personal Property Registry, it finds that Bank C has a security agreement that says it can claim collateral over the car that the consumer is about to buy.”		<blockquote>“Bank C takes a security interest over all chattels (personal, moveable possessions) that a consumer owns now and might acquire in the future. (The ''Personal Property Security Act'' allows this type of agreement.) If the consumer owns household furnishings and one car now, and later buys a second car using cash, the second car becomes collateral under the Bank C security agreement. But, consider if the consumer only owned household furnishings when the security agreement with the bank was made. Suppose later the consumer wants to buy a car and does not have the cash to buy it. If a car dealership sells the consumer a car on credit, it will probably want security. (Or, if another creditor — such as a bank — gives the consumer a loan to buy the car, it too will probably want security.) When the car dealership searches the Personal Property Registry, it finds that Bank C has a security agreement that says it can claim collateral over the car that the consumer is about to buy.”
	</blockquote>		</blockquote>

Drew Jackson: /* Priority of security interests */

2018-10-12T13:06:42Z

Priority of security interests

← Older revision		Revision as of 13:06, 12 October 2018
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	=== Priority of security interests===		=== Priority of security interests===
	Setting '''priorities''' for competing security interests is an important, and complicated, part of the ''[http://canlii.ca/t/8495 Personal Property Security Act]''. The following is a simple example of a priority issue, written using the terminology of the Act:		Setting '''priorities''' for competing security interests is an important, and complicated, part of the ''[http://canlii.ca/t/8495 Personal Property Security Act]''. The following is a simple example of a priority issue, written using the terminology of the Act:
			<blockquote>
	:“Bank A and Bank B take security over the same collateral, a truck, from a debtor company called Mike’s Movers Ltd. Both banks have perfected their security by properly registering a financing statement. Mike’s Movers Ltd. defaults on both payment obligations. Who gets priority in taking the truck?”		“Bank A and Bank B take security over the same collateral, a truck, from a debtor company called Mike’s Movers Ltd. Both banks have perfected their security by properly registering a financing statement. Mike’s Movers Ltd. defaults on both payment obligations. Who gets priority in taking the truck?”
			</blockquote>
	The answer is fairly predictable: the secured party that was first to “perfect” takes priority. Assume Bank A was the first. It gets to have the full amount of its obligation paid before Bank B gets anything — there is no pro rata sharing. It is important to remember that secured parties generally take priority over any unsecured creditor. A creditor who has a judgment and who wants the court bailiff to seize the truck to pay a judgment only gets paid after both banks are paid in full.		The answer is fairly predictable: the secured party that was first to “perfect” takes priority. Assume Bank A was the first. It gets to have the full amount of its obligation paid before Bank B gets anything — there is no pro rata sharing. It is important to remember that secured parties generally take priority over any unsecured creditor. A creditor who has a judgment and who wants the court bailiff to seize the truck to pay a judgment only gets paid after both banks are paid in full.

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	Here is an example of when a PMSI might be relevant:		Here is an example of when a PMSI might be relevant:
	<blockquote>
	“Bank C takes a security interest over all chattels (personal, moveable possessions) that a consumer owns now and might acquire in the future. (The ''Personal Property Security Act'' allows this type of agreement.) If the consumer owns household furnishings and one car now, and later buys a second car using cash, the second car becomes collateral under the Bank C security agreement. But, consider if the consumer only owned household furnishings when the security agreement with the bank was made. Suppose later the consumer wants to buy a car and does not have the cash to buy it. If a car dealership sells the consumer a car on credit, it will probably want security. (Or, if another creditor — such as a bank — gives the consumer a loan to buy the car, it too will probably want security.) When the car dealership searches the Personal Property Registry, it finds that Bank C has a security agreement that says it can claim collateral over the car that the consumer is about to buy.”		</blockquote>“Bank C takes a security interest over all chattels (personal, moveable possessions) that a consumer owns now and might acquire in the future. (The ''Personal Property Security Act'' allows this type of agreement.) If the consumer owns household furnishings and one car now, and later buys a second car using cash, the second car becomes collateral under the Bank C security agreement. But, consider if the consumer only owned household furnishings when the security agreement with the bank was made. Suppose later the consumer wants to buy a car and does not have the cash to buy it. If a car dealership sells the consumer a car on credit, it will probably want security. (Or, if another creditor — such as a bank — gives the consumer a loan to buy the car, it too will probably want security.) When the car dealership searches the Personal Property Registry, it finds that Bank C has a security agreement that says it can claim collateral over the car that the consumer is about to buy.”
	</blockquote>		</blockquote>

Drew Jackson: /* Priority of security interests */

2018-10-12T13:06:03Z

Priority of security interests

← Older revision		Revision as of 13:06, 12 October 2018
Line 58:		Line 58:
	=== Priority of security interests===		=== Priority of security interests===
	Setting '''priorities''' for competing security interests is an important, and complicated, part of the ''[http://canlii.ca/t/8495 Personal Property Security Act]''. The following is a simple example of a priority issue, written using the terminology of the Act:		Setting '''priorities''' for competing security interests is an important, and complicated, part of the ''[http://canlii.ca/t/8495 Personal Property Security Act]''. The following is a simple example of a priority issue, written using the terminology of the Act:
	~~<blockquote>~~
	“Bank A and Bank B take security over the same collateral, a truck, from a debtor company called Mike’s Movers Ltd. Both banks have perfected their security by properly registering a financing statement. Mike’s Movers Ltd. defaults on both payment obligations. Who gets priority in taking the truck?”		:“Bank A and Bank B take security over the same collateral, a truck, from a debtor company called Mike’s Movers Ltd. Both banks have perfected their security by properly registering a financing statement. Mike’s Movers Ltd. defaults on both payment obligations. Who gets priority in taking the truck?”
	~~</blockquote>~~

	The answer is fairly predictable: the secured party that was first to “perfect” takes priority. Assume Bank A was the first. It gets to have the full amount of its obligation paid before Bank B gets anything — there is no pro rata sharing. It is important to remember that secured parties generally take priority over any unsecured creditor. A creditor who has a judgment and who wants the court bailiff to seize the truck to pay a judgment only gets paid after both banks are paid in full.		The answer is fairly predictable: the secured party that was first to “perfect” takes priority. Assume Bank A was the first. It gets to have the full amount of its obligation paid before Bank B gets anything — there is no pro rata sharing. It is important to remember that secured parties generally take priority over any unsecured creditor. A creditor who has a judgment and who wants the court bailiff to seize the truck to pay a judgment only gets paid after both banks are paid in full.

Drew Jackson: /* Summary of the law */

2018-10-12T13:02:21Z

Summary of the law

← Older revision		Revision as of 13:02, 12 October 2018
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	[[File:Consumer_Law_and_Debt_-_Security_Agreements.jpg\|thumb\|275px\|right\| link=\| <span style="font-size:50%;">Image via www.istockphoto.com</span>]]		[[File:Consumer_Law_and_Debt_-_Security_Agreements.jpg\|thumb\|275px\|right\| link=\| <span style="font-size:50%;">Image via www.istockphoto.com</span>]]
	When a buyer does not have the money to pay for goods at the time of purchase, there are two ways the sale can be financed:		When a buyer does not have the money to pay for goods at the time of purchase, there are two ways the sale can be financed:
	* '''The seller extends credit to the buyer:''' This means that the seller and buyer agree that the buyer will pay for the goods over a period of time.		* '''The seller extends credit to the buyer''': This means that the seller and buyer agree that the buyer will pay for the goods over a period of time.
	* '''The buyer borrows money to pay for the goods:''' The buyer may borrow from a lender such as a bank or credit union.		* '''The buyer borrows money to pay for the goods''': The buyer may borrow from a lender such as a bank or credit union.

	When a buyer borrows money from a lender, that lender wants to ensure that the full amount is repaid and may want more protection than just the buyer’s promise. Similarly, a seller who extends credit as part of a sale is concerned about eventually being paid in full for the goods.		When a buyer borrows money from a lender, that lender wants to ensure that the full amount is repaid and may want more protection than just the buyer’s promise. Similarly, a seller who extends credit as part of a sale is concerned about eventually being paid in full for the goods.

Drew Jackson at 14:35, 9 October 2018

2018-10-09T14:35:15Z

← Older revision		Revision as of 14:35, 9 October 2018
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	A '''security agreement''' documents an intention to grant another party a security interest in personal property to make sure a loan is paid back or a promise is kept.		A '''security agreement''' documents an intention to grant another party a security interest in personal property to make sure a loan is paid back or a promise is kept.

	== Client problems==		== Client problems==
	* Client wants to know what a car dealer means when the dealer says it will take a “lien” over a car as part of a financing arrangement.		* Client wants to know what a car dealer means when the dealer says it will take a “lien” over a car as part of a financing arrangement.
Line 8:		Line 9:
	* Client is behind in car payments and wants to know their rights because the lender is threatening to repossess the car.		* Client is behind in car payments and wants to know their rights because the lender is threatening to repossess the car.
	* Client’s car was repossessed because of missed payments and the client wants to know if anything can be done about it.		* Client’s car was repossessed because of missed payments and the client wants to know if anything can be done about it.

	== Summary of the law==		== Summary of the law==
	[[File:Consumer_Law_and_Debt_-_Security_Agreements.jpg\|thumb\|275px\|right\| link=\| <span style="font-size:50%;">Image via www.istockphoto.com</span>]]		[[File:Consumer_Law_and_Debt_-_Security_Agreements.jpg\|thumb\|275px\|right\| link=\| <span style="font-size:50%;">Image via www.istockphoto.com</span>]]

Elena Renderos at 00:19, 9 October 2018

2018-10-09T00:19:37Z

← Older revision		Revision as of 00:19, 9 October 2018
Line 56:		Line 56:

	=== Priority of security interests===		=== Priority of security interests===
	Setting '''priorities''' for competing security interests is an important, and complicated, part of the [http://canlii.ca/t/8495 Personal Property Security Act]. The following is a simple example of a priority issue, written using the terminology of the Act:		Setting '''priorities''' for competing security interests is an important, and complicated, part of the ''[http://canlii.ca/t/8495 Personal Property Security Act]''. The following is a simple example of a priority issue, written using the terminology of the Act:
	<blockquote>		<blockquote>
	“Bank A and Bank B take security over the same collateral, a truck, from a debtor company called Mike’s Movers Ltd. Both banks have perfected their security by properly registering a financing statement. Mike’s Movers Ltd. defaults on both payment obligations. Who gets priority in taking the truck?”		“Bank A and Bank B take security over the same collateral, a truck, from a debtor company called Mike’s Movers Ltd. Both banks have perfected their security by properly registering a financing statement. Mike’s Movers Ltd. defaults on both payment obligations. Who gets priority in taking the truck?”

Elena Renderos at 05:26, 20 September 2018

2018-09-20T05:26:54Z

← Older revision		Revision as of 05:26, 20 September 2018
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	== Summary of the law==		== Summary of the law==
			[[File:Consumer_Law_and_Debt_-_Security_Agreements.jpg\|thumb\|275px\|right\| link=\| <span style="font-size:50%;">Image via www.istockphoto.com</span>]]
	When a buyer does not have the money to pay for goods at the time of purchase, there are two ways the sale can be financed:		When a buyer does not have the money to pay for goods at the time of purchase, there are two ways the sale can be financed:
	* '''The seller extends credit to the buyer:''' This means that the seller and buyer agree that the buyer will pay for the goods over a period of time.		* '''The seller extends credit to the buyer:''' This means that the seller and buyer agree that the buyer will pay for the goods over a period of time.

Elena Renderos at 19:29, 19 September 2018

2018-09-19T19:29:50Z

← Older revision		Revision as of 19:29, 19 September 2018
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	== Related topics and materials ==		== Related topics and materials ==
	See other sections on mortgages and secured loans:		See other sections on mortgages and secured loans:
	* Mortgages and ~~Foreclosures~~		* [[Mortgages and Foreclosures]]
	* Prepayment ~~Rights~~		* [[Prepayment Rights]]

	See related topics:		See related topics:
	* Assignments in ~~Bankruptcy~~		* [[Assignments in Bankruptcy]]
	* Bailiffs, Court Bailiffs and ~~Sheriffs~~		* [[Bailiffs, Court Bailiffs and Sheriffs]]
	* Consumer and Ordinary ~~Proposals~~		* [[Consumer and Ordinary Proposals]]
	* Enforcing Judgments Against ~~Chattels~~		* [[Enforcing Judgments Against Chattels]]
	* ~~Leases~~		* [[Leases]]
	* Types of Lenders and Creditors		* [[Types of Lenders and Creditors]]

	See also “[https://www.clicklaw.bc.ca/resource/1725 Consumer Protection]”, a chapter in the manual used by the UBC Law Students’ Legal Advice Program.		See also “[https://www.clicklaw.bc.ca/resource/1725 Consumer Protection]”, a chapter in the manual used by the UBC Law Students’ Legal Advice Program.