Form 1120 Schedule M 3 Governing 2019-2024

Welcome, welcome. Let's talk about a fun and exciting area called secured transactions. Many of the topics that we're going to deal with involve both the creditor and the debtor. So let's say, for example, I loan money to you. I want to protect my interest. There are three different ways we're going to look at in the next several chapters on how to protect myself and get my money back. So, I loan you money. One way is I take an asset as collateral to secure the transaction. That's what this chapter talks about. Another way is I say I'll loan you money, but go get a cosigner, a guarantor, a surety called suretyship. The third way, which is the least desirable, is I'm going to force you into bankruptcy and hopefully get paid as either a perfected secured creditor or a general unsecured creditor. So, again, I loan you money, three ways to protect myself. The creditor's objective is to get that money back, to collect the money. How do I do it? One way is to secure the transaction by getting collateral. That way, if you don't pay me, I take your house, I take your car, I take your kids, I take your dog, and I eat it. Another way is to get a cosigner, guarantor, or a surety. The third way, which is the least desirable, is to force you into bankruptcy (chapter 7, 11, 13), which we'll talk about in another section. This section starts out with secured transactions. It is covered by UCC article nine, so this is called secured transactions UCC article nine. So, what we're doing is basically the following: the creditor is going to either loan you money or extend you credit to the debtor. What we're going to do is I loan...