Secured Party Priority in Future Advances to a Debtor

The video tutorial explains the concept of future advances in secured transactions, focusing on scenarios involving secured parties, debtors, and collateral. It covers the priority of security interests in cases of additional credit extensions, lien creditors, and the sale of collateral. The tutorial highlights the importance of timing and knowledge in maintaining priority over other creditors and buyers.

What is the maximum amount a secured party can lend to a debtor if the collateral is worth $20 and the initial loan was $10?

• $20

• $15

• $10

• $5

Under what condition does a future advance have priority over a lien creditor?

• If the advance is made within 60 days of the lien attaching

• If the advance is made within 45 days of the lien attaching

• If the advance is made within 90 days of the lien attaching

• If the advance is made within 30 days of the lien attaching

What must a secured party lack to maintain priority when making a future advance outside the 45-day window?

• Knowledge of the collateral's value

• Knowledge of the debtor's financial status

• Knowledge of the lien attaching

• Knowledge of the debtor's bankruptcy

When does a buyer in the ordinary course take collateral free of a security interest?

• When the future advance is made within 45 days of the sale

• When the future advance is made within 60 days of the sale

• When the future advance is made within 90 days of the sale

• When the future advance is made within 30 days of the sale

What condition allows a future advance to trump the rights of a buyer in the ordinary course?

• The advance is made with knowledge of the sale

• The advance is made after 60 days of the sale

• The advance is made within 30 days of the sale

• The advance is made pursuant to an agreement within 45 days of the sale