Steve owns a car. He decides that he needs a loan in order to improve his house
Steve owns a car. He decides that he needs a loan in order to improve his house, so he goes to Liv. He agrees to give Liv a security interest in the car in exchange for $4,000. Two weeks later he decides that he needs more money.
He goes to Dane. He gives Dane a security interest in the car in exchange for $10,000. Dane files a financing statement to perfect the interest. A week after that Liv does the same. Eventually, Steve defaults in his payments. The car is reposed, and it is sold for $3,000. How much money will Dane receive? How much money will Liv receive?
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To understand the implications of the agreements between Steve, Liv and Dane, we need to remember that there are legal provisions governing the lending of money especially where personal property is used as a security. In many times, mere agreements are not enforceable by law as there is need of proof for every agreement. Thus, the government through the public records office or secretary of state provides services…………
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