Secured Credit

• Semester: Fall 2021
• Course ID: 380D
• Credit Hours: 3
• Unique: 29235

Description

This course covers credit transactions in which the loan is secured by an interest in personal property. Secured credit is a very important part of both consumer and commercial lending. This course will study both contexts, examining how secured transactions are structured and why they are structured that way. These transactions are largely governed by Article 9 of the Uniform Commercial Code. The course does not cover loans secured by mortgages on real estate. A secured loan is one in which the debtor and lender agree that if the debtor does not pay, the lender can take specific items of property from the debtor. This property is called collateral, and the lender is said to have a security interest in the collateral. The collateral may be tangible property such as inventory, equipment, and consumer goods, or intangible property such as stocks and bonds or the debtor's right to collect from people who owe money to him. The course examines the mechanics of making secured loans, the rules that govern repossessing the collateral if the debtor doesn't pay, and what can happen to security interests if the debtor goes bankrupt. It also examines the priority rules that rank competing claims to the same collateral. There may be many such claims. More than one secured lender may have a security interest in the collateral; unsecured creditors may seize the collateral to collect a judgment; customers or other third parties may buy the collateral; the collateral may be affixed to real estate and become subject to the claims of people with interests in the real estate. This is also a course in statutory construction. We will devote very careful attention to using and interpreting the Uniform Commercial Code and the Bankruptcy Code. We will progress from relatively simple statutory provisions to quite difficult ones, learning the skills that can be applied to all sorts of statutes. Westbrook sometimes offers a one-hour adjunct to the Secured Credit course. This Secured Credit workshop adjunct course is open only to those taking his regular three-hour Secured Credit course. Requirements include a small number of additional classes and a 15-20 page paper on a Secured Credit topic. A student who takes this adjunct course gets one four-hour grade based on a combination of the student's examination in the regular course and performance in the one-hour course (especially on the paper). Enrollment is limited. Taking the workshop is not required to take the main three hour course. Students who choose the Workshop have included those who want to study advanced commercial law topics and theory, but also those who have no business background and want a cushion rather than putting the whole grade on a final exam.  While the course is not remedial or tutorial, philosophy or art history majors usually find it makes them more comfortable and confident in the main course.