which of the following is not true about article 9 of the ucc - confused about basics
I'm studying for my banking exam and keep getting tripped up on Article 9 fundamentals. My practice test had this question about which statement ISN'T true about Article 9 of the UCC and I bombed it completely. The options were about perfection methods, priority rules, scope coverage, and filing requirements but I honestly couldn't eliminate any of them with confidence. I thought I understood secured transactions but apparently not! Can someone break down the core Article 9 principles that trip people up? I need to understand what makes a statement about Article 9 FALSE versus true. My exam is next week and I'm panicking that I don't have the foundation down. What are the most commonly misunderstood aspects of Article 9 that show up in these types of questions?
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Eli Wang
Article 9 can be tricky! The most common misconceptions I see are about perfection methods - people think filing a UCC-1 is the ONLY way to perfect when there's also possession, control, and automatic perfection for certain collateral types. Also priority rules get mixed up - secured vs unsecured, purchase money vs non-purchase money. What specific areas are you struggling with?
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Nora Brooks
•The priority stuff definitely confuses me. Like when does a PMSI get super-priority and when doesn't it? And I keep mixing up attachment vs perfection requirements.
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Eli Wang
•PMSI super-priority depends on collateral type and timing. For inventory you need to notify other secured parties before debtor gets possession. For equipment it's just file within 20 days of debtor getting possession. Attachment needs value, rights in collateral, and authenticated security agreement. Perfection is separate - usually filing UCC-1.
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Cassandra Moon
I failed this exact type of question on my first attempt! The trick is they often make false statements about scope - like saying Article 9 covers real estate mortgages (it doesn't, except fixtures) or wage assignments (mostly excluded). They also love to mess with filing location rules or make up fake perfection methods.
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Nora Brooks
•Wait so Article 9 doesn't cover mortgages at all? I thought it covered everything with collateral!
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Cassandra Moon
•Nope! Real estate mortgages are governed by state real estate law, not Article 9. Article 9 only touches real estate for fixture filings when personal property becomes attached to realty. Huge distinction that trips people up.
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Zane Hernandez
•This is why I always got confused too. The scope exclusions are numerous - wage assignments, landlord liens, insurance (except as proceeds), most real estate interests.
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Genevieve Cavalier
Had the same panic before my exam! What helped me was making a chart of what Article 9 DOES vs DOESN'T cover. Does cover: equipment, inventory, accounts, deposit accounts, investment property, etc. Doesn't cover: real estate mortgages, most wage assignments, statutory liens, insurance policies themselves. The false statements usually relate to these exclusions.
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Nora Brooks
•That's a great idea. Do you remember any other common false statements they use?
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Genevieve Cavalier
•They love saying stuff like 'oral security agreements are always invalid' (false - some collateral types allow oral agreements) or 'UCC-1 financing statements must be signed' (false since 2001 revision). Also watch for mixing up state filing locations.
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Ethan Scott
Been dealing with UCC filings for years and I've seen so many people mess up the basics. One thing that might help - I started using Certana.ai's document verification tool when I need to check if UCC-1 forms match up with security agreements properly. You can upload your study materials or practice documents and it'll flag inconsistencies in debtor names, collateral descriptions, etc. Helped me catch errors I was making in my understanding.
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Nora Brooks
•Is that for actual filings or can it help with study materials? I need to understand the concepts better.
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Ethan Scott
•It's mainly for real documents but seeing how it identifies mismatches in actual UCC forms really helped me understand what makes filings valid vs invalid. The PDF upload feature shows you exactly what elements need to align between different documents.
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Eli Wang
•That's actually smart for learning - seeing real examples of what goes wrong in filings would definitely help with test questions about what's false vs true.
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Lola Perez
The false statement questions usually target these areas: 1) Perfection methods (they'll say only filing works), 2) Priority rules (they'll mess up PMSI timing), 3) Scope (they'll include excluded transactions), 4) Filing requirements (they'll add fake requirements or wrong locations). Focus your review on exceptions and exclusions - that's where the false statements hide!
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Nora Brooks
•This is super helpful! So I should pay extra attention to what Article 9 DOESN'T cover rather than just what it does cover?
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Lola Perez
•Exactly! Test makers love to slip in excluded transactions and make them sound like they're covered. Real estate mortgages, consumer deposits, landlord liens - know the exclusions cold.
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Nathaniel Stewart
ugh these questions are the worst!! I swear they deliberately write them to be confusing. Like they'll have four statements that all SOUND true but one has a tiny technical error. Usually about filing locations or perfection timing requirements.
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Nora Brooks
•Yes! That's exactly what happened to me. They all seemed reasonable but apparently one was wrong.
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Nathaniel Stewart
•The timing ones get me every time. Like is it 20 days for PMSI or 21 days? Is continuation 6 months before or after? These tiny details kill me.
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Eli Wang
•PMSI for equipment is 20 days after debtor gets possession. UCC-3 continuation must be filed within 6 months before expiration. The details matter on exams!
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Riya Sharma
Pro tip from someone who teaches this stuff - when you see 'which is NOT true' questions, eliminate the obviously true statements first. Usually 2-3 will be clearly correct basic principles. The false one often involves: wrong filing office, incorrect perfection method, excluded transaction type, or messed up priority rule timing.
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Nora Brooks
•That's a good strategy. Should I memorize all the excluded transaction types?
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Riya Sharma
•Know the major ones: real estate mortgages, wage assignments (with exceptions), statutory liens, insurance policies themselves. Don't need to memorize every exclusion but know the big categories that trip people up.
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Genevieve Cavalier
•Also know that consumer goods under $1000 can have automatic perfection - that's a common 'false' statement they make by saying ALL consumer goods need filing.
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Santiago Diaz
I remember being so stressed about this exact type of question! What helped me was understanding that Article 9 is about PERSONAL property security interests, not real property. When they slip in real estate stuff as 'covered by Article 9' that's usually your false statement right there.
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Nora Brooks
•So fixtures are the only real estate connection?
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Santiago Diaz
•Right - fixtures are personal property that becomes attached to real estate. Article 9 covers the security interest in the fixture itself, but the filing might need to be in real estate records depending on the state.
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Millie Long
Another tool that's been super helpful - I upload sample UCC documents to Certana.ai to see how it verifies the different elements match up. Seeing how it identifies problems with debtor names or collateral descriptions really drove home the technical requirements. Sometimes hands-on verification helps more than just reading about the rules.
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Nora Brooks
•Did that help you understand what makes statements true vs false?
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Millie Long
•Definitely! When you see how strict the matching requirements are for things like exact debtor names, you understand why test questions about 'substantial similarity is enough' would be false statements.
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KaiEsmeralda
Study tip that worked for me: make flashcards of common WRONG statements about Article 9. Like 'Article 9 covers all types of collateral' (false - excludes real estate mortgages). 'Security agreements must always be in writing' (false - some oral agreements allowed). 'Filing location is always the debtor's state' (false - depends on debtor type). Practice identifying false statements!
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Nora Brooks
•This is brilliant! Making a collection of false statements to practice with. Do you have any others?
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KaiEsmeralda
•Financing statements expire after 6' (years false - 5)years '. PMSI priority applies to all collateral types' (equally false - different rules for inventory vs)equipment '. Perfection always requires' (filing false - possession, control, automatic perfection)exist.
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Eli Wang
•Good ones! Also 'debtor must sign the financing statement' (false - only security agreement needs debtor authentication, not the UCC-1 filing).
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Debra Bai
You got this! The key insight is that false statements usually involve: 1) absolute words like 'always' or 'never' when exceptions exist, 2) including excluded transactions, 3) wrong filing procedures, 4) mixed up priority rules. Article 9 has lots of nuances so broad absolute statements are often false.
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Nora Brooks
•Thank you everyone! This has been incredibly helpful. I feel like I have a much better framework for approaching these questions now.
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Debra Bai
•Good luck on your exam! Remember - when in doubt, think about the exceptions and exclusions. That's where the false statements usually hide.
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