Which one of the following statements about the Personal Property Security Act is true?
A) In a situation where a debtor fraudulently attempts to transfer property that he has given as security, the Act is designed to protect both the debtor and secured creditor.
B) This legislation applies only to all present transactions where personal property is given as security interest to enforce an obligation.
C) If a secured creditor fails to register his security interest in the Personal Property Registry, he loses his rights against the debtor.
D) Unless a creditor in a secured transaction covered by this Act takes steps to "attach and perfect" his security interest, he could lose that interest to someone outside the contract.
E) If someone suspects that an item of personal property has been given as security by a particular person, he can sue on the breach of a condition.

Question

Quizplus · Accepted Answer

The Personal Property Security Act requires a creditor in a secured transaction to take steps to "attach and perfect" his security interest in order to protect his interest in the property. If this is not done, the creditor could lose his interest to someone outside the contract. The Act does not protect fraudulent transfers by the debtor, nor does it provide a cause of action for breach of condition. The Act applies to both present and future transactions where personal property is given as security interest to enforce an obligation. If a secured creditor fails to register his security interest in the Personal Property Registry, he may lose his priority over other creditors, but not his rights against the debtor.

Which One of the Following Statements About the Personal Property