Question

Sung buys a refrigerator from Appliance Depot with a down payment, and the store creates a PMSI in the refrigerator so that she can pay it off over time. For Appliance Depot to have the PMSI perfected, it must:
a. do nothing, as PMSIs are automatically perfected.
b. keep possession of the refrigerator until she has paid off half the cost.
c. file with the appropriate agency under Sung.

Answer 1

Answer:

Answer is Option A: do nothing, as PMSIs are automatically perfected.

Explanation:

PMSI stands for Purchase-Money Security Interest which is a legal claim that a lender can do to repossess the property financed with its loan. He may also demand repayment in cash in case the borrower defaults. But  in case of consumer goods, PMSI in consumer goods is not required to be filled because it is automatically perfected without filling.

In the given scenario when a refrigerator is bought and the store create PMSI in the refrigerator so that Sung can pay it over time, they have to do nothing do get PMSI perfected.