2.  What the debtor receives upon the sale, exchange, collection, or other disposition of collateral (or proceeds of collateral).

3.  May include property in which the creditor could not obtain a security interest originally such as:  Cash  Insurance proceeds on damaged, destroyed, or stolen collateral.

4.  Creditor’s security interest automatically continues in proceeds.  The security agreement does not need to mention proceeds.

5.  Problem 367 – p. 991  Problem 368 – p. 995

6.  Automatically perfected for 20 days.  Three methods to continue perfection beyond these 20 days:

7.  1. Same Office  Original security interest perfected by filing and a financing statement covering the proceeds would be filed in the same place as the original collateral.

8.  2. Identifiable cash proceeds

9.  3. Proceeds perfected within the 20 day period:  Creditor may or may not need to take affirmative action to achieve this perfection.

10.  Problem 369 – p. 996  Chattel paper financier prevails over creditor with interest in chattel paper as proceeds.  Problem 370 – p. 996  Tracing  Problem 371 – p. 1006  “Double Debtor” issue

11.  Problem 372 – p. 1006  Problem 373 – p. 1007