Tangible Chattel Paper refers to a physical document that serves as evidence of a debt owed and grants the lender the right to seize specific assets in case of non-payment. It is commonly utilised in credit transactions to safeguard the seller’s financial interests.
Tangible chattel paper refers to a written document that demonstrates a monetary obligation and a security interest in or a lease of particular goods. It is commonly utilised in consumer transactions, where a consumer purchases goods on credit and commits to paying for them through a promissory note, while the seller retains a security interest in the goods. For instance, a car loan agreement serves as a typical example of tangible chattel paper. When an individual buys a car on credit, they sign a promissory note, promising to repay the loan, while the lender maintains a security interest in the car until the loan is fully settled. Similarly, a lease agreement for equipment involves the lessee agreeing to pay rent for the equipment’s use, while the lessor retains a security interest in the equipment. These examples effectively demonstrate tangible chattel paper as they involve a written document that showcases a monetary obligation (loan or rent payments) and a security interest in specific goods (car or equipment). The document serves as evidence of the agreement between the parties and outlines their respective rights and obligations.
Tangible chattel paper refers to a document that represents a security interest in a physical object, such as a car or a piece of equipment.
Tangible chattel paper is different from other types of chattel paper because it represents a security interest in a physical object, whereas other types of chattel paper represent a security interest in non-physical assets, such as accounts receivable.
To create tangible chattel paper, the document must be in writing, signed by the debtor, and describe the collateral in a way that allows it to be identified.
The purpose of tangible chattel paper is to provide a means for creditors to secure their interest in physical assets.
Tangible chattel paper is enforced through the filing of a UCC-1 financing statement with the appropriate state agency.
If the debtor defaults on a tangible chattel paper agreement, the creditor may repossess the collateral and sell it to satisfy the debt.
Yes, tangible chattel paper can be transferred to another party through an assignment or sale.
Tangible chattel paper is a document that represents a security interest in a physical object, while a security agreement is a contract that creates a security interest in any type of collateral.
The statute of limitations for enforcing tangible chattel paper varies by state, but is typically between 3 and 6 years.
If there is a dispute over the ownership of the collateral described in tangible chattel paper, the matter may be resolved through litigation or arbitration.
This site contains general legal information but does not constitute professional legal advice for your particular situation. Persuing this glossary does not create an attorney-client or legal adviser relationship. If you have specific questions, please consult a qualified attorney licensed in your jurisdiction.
This glossary post was last updated: 17th April 2024.
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