Permanent Perfection of Purchase Money Security Interest

The video tutorial explains the concept of a purchase money security interest (PMSI) in non-consumer goods, which is temporarily perfected for 20 days after the debtor takes possession of the collateral. To permanently perfect this interest, a UCC or financing statement must be filed, typically with the Secretary of State's office. Filing within the 20-day grace period ensures the PMSI has priority over other security interests. If the debtor defaults, the property can be sold to satisfy debts, with the PMSI holder having the first right to payment.

What is the duration for which a purchase money security interest is temporarily perfected?

• 40 days

• 10 days

• 20 days

• 30 days

Which document is typically filed to permanently perfect a purchase money security interest?

• A mortgage deed

• A UCC statement

• A lease agreement

• A promissory note

Where is a financing statement usually filed to perfect a PMSI?

• Local police station

• Secretary of State's office

• Department of Motor Vehicles

• Local library

What happens if a financing statement is filed within the 20-day grace period?

• The PMSI gains priority over other interests

• The PMSI is voided

• The PMSI loses priority

• The PMSI is transferred to another party

What is the consequence if the debtor defaults and the property needs to be sold?

• The sale is canceled

• The property is given to the debtor

• The PMSI holder has the first right to payment

• The PMSI is ignored