1. Credit Instruments and Legal Documentation

2. CONTRACTS FOUR ESSENTIAL ELEMENTS:
PARTIES TO A CONTRACT MUST BE LEGALLY COMPETENT
SUBJECT MATTER MUST BE LEGAL AND PROPER
MUST BE EVIDENCE OF AN OFFER AND AN ACCEPTANCE
MUST BE CONSIDERATION

3. PROMISSORY NOTE THE PRIMARY LEGAL DOCUMENT IN A LOAN CONTRACT
A WRITTEN PROMISE OF THE BORROWER TO REPAY A LOAN

4. NOTES CAN BE SECURED OR UNSECURED
THE PURPOSE OF SECURITY OR COLLATERAL IS TO REDUCE THE DEFAULT RISK

5. REAL PROPERTY
THE DEED OF TRUST IS THE INSTRUMENT USED TO ESTABLISH A SECURITY INTEREST IN REAL PROPERTY
IT IS A THREE PARTY INSTRUMENT
LENDER
BORROWER
TRUSTEE

6. WARRANTY DEED THE INSTRUMENT THAT TRANSFERS TITLE IN REAL PROPERTY
THE SELLER IS GUARANTEEING THAT THE TITLE IS FREE AND CLEAR OF ENCUMBRANCES

7. QUITCLAIM DEED
THE SELLER IS AGREEING ONLY TO CONVEY ANY INTEREST IN THE PROPERTY, BUT NOT GUARANTEEING THAT THE PROPERTY IS FREE OF ENCUMBRANCES BY OTHERS

8. UNIFORM COMMERCIAL CODE (UCC)
ALL LAWS THAT GOVERN TANGIBLE AND INTANGIBLE PERSONAL PROPERTY
TANGIBLE PERSONAL PROPERTY
CONSUMER GOODS
EQUIPMENT
FARM PRODUCTS

9. INTANGIBLE PERSONAL PROPERTY
NEGOTIABLE INSTRUMENTS
DOCUMENTS OF TITLE
ACCOUNTS
CONTRACT RIGHTS

10. UNDER THE UCC THE PARTIES IN A SECURED TRANSACTION ARE THE DEBTOR (BORROWER) AND THE SECURED PARTY (LENDER OR SECURED SELLER)

11. THE SECURED PARTY OBTAINS A SECURITY INTEREST (LIEN) IN COLLATERAL (PERSONAL PROPERTY GIVEN AS SECURITY) BY ENTERING INTO A SECURITY AGREEMENT (CREATES A SECURITY INTEREST)

12. FINANCING STATEMENT
SHOWS THE NAME AND MAILING ADDRESS OF THE BORROWER AND SECURED PARTY AND A DESCRIPTION OF THE COLLATERAL AND MUST BE SIGNED BY BOTH PARTIES.

13. OTHER CREDIT INSTRUMENTS
ABSTRACT - ALL DEEDS, MORTGAGES, FORECLOSURES, AND OTHER PERTINENT FACTS THAT AFFECT TITLE TO LAND.
TITLE INSURANCE - USED IN PLACE OF AN ABSTRACT.

14. A LIEN IS A CLAIM OR ENCUMBRANCE ON A PROPERTY.
FORECLOSURE IS THE PROCESS UNDER WHICH LENDERS EXERCISE THEIR RIGHTS TO HAVE SECURITY SOLD AND THE PROCEEDS APPLIED TO THE OUTSTANDING LOAN BALANCE.

15. BANKRUPTCY
CHAPTER 7
PROVIDES FOR LIQUIDATION OF ASSETS FOR THE SATISFACTION OF LEGALLY DISCHARGEABLE DEBTS
CHAPTER 12
FOR FARMERS ONLY, ALLOWS REORGANIZATION OF THE BUSINESS TO MEET DEBT

16. CHAPTER 11
ALLOWS DEBT ADJUSTMENT AND REORGANIZATION AND IS COMMONLY USED FOR BUSINESS REORGANIZATION
CHAPTER 13
INVOLVES REORGANIZATION OR
ADJUSTMENT OF DEBTS OF AN INDIVIDUAL
WITH REGULAR INCOME.

17. CHAPTER 12 BANKRUPTCY
ENACTED IN 1986 IN RESPONSE TO THE FARM FINANCIAL CRISIS OF THE 1980s
MODIFIES THE NORMAL CHAPTER 11 PROCEDURE BY PERMITTING FARMERS TO SUBMIT A REORGANIZATION PLAN DIRECTLY TO THE BANKRUPTCY COURT, WITH NO REVIEW BY CREDITORS.

18. GIVES FARMERS CONSIDERABLE POWER TO DEMAND CONCESSIONS FROM LENDERS RELATIVE TO CHAPTER 11