ExpertHard1 markMultiple Choice
CPA · Question 59 · Area II: Business Law
Under the UCC Secured Transactions Article (Article 9), if a debtor defaults, which of the following is a right of the secured party?
Under the UCC Secured Transactions Article (Article 9), if a debtor defaults, which of the following is a right of the secured party?
Answer options:
A.
To retain the collateral in full satisfaction of the debt, even if the debtor objects.
B.
To take possession of the collateral without judicial process if it can be done without a breach of the peace.
C.
To sell the collateral at a private sale without notifying the debtor.
D.
To keep any surplus from the sale of the collateral.
How to approach this question
Repo Man Rule: You can take the car (collateral) yourself, as long as you don't break the law or start a fight (breach of peace).
Full Answer
B.To take possession of the collateral without judicial process if it can be done without a breach of the peace.✓ Correct
UCC §9-609 allows a secured party to take possession of collateral after default without judicial process (self-help), provided they do not breach the peace.
Common mistakes
Thinking you always need a court order.
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