Which of the following is true of the rule of priorities regarding the disposal of a debtor's property when the debtor defaults?
A) Persons who become lien creditors before or after the security interest is perfected win.
B) If the security interest was perfected at the time of filing for bankruptcy, the bankruptcy trustee can take the collateral.
C) The Bankruptcy Act provides that a bankruptcy trustee can avoid a transfer of an interest of the debtor in property to or for the benefit of a creditor.
D) A perfected purchase-money security interest in goods other than inventory or livestock has priority over a conflicting security interest in the same goods.
E) A mortgage has priority over a perfected security in fixtures, even if the security interest is a purchase-money security interest.

Question

Quizplus · Accepted Answer

Under the rule of priorities, a perfected purchase-money security interest in goods other than inventory or livestock has priority over a conflicting security interest in the same goods. This means that if a lender has a purchase-money security interest in a debtor's property, and another creditor claims a security interest in the same property, the purchase-money lender will have priority.

Which of the Following Is True of the Rule of Priorities