Aviation Law (Chapter 11 and 12)
Questions and Answers | Latest Update |
2024/2025 | Graded A+
What is a security interest in aviation?
✔✔A security interest in aviation refers to a legal claim on an aircraft or related assets to secure
repayment of a loan or obligation.
How is a security interest created in aviation?
✔✔A security interest is created through a security agreement between the lender and borrower,
outlining the terms and the collateral involved.
What role does the International Registry play in aviation security interests?
✔✔The International Registry helps in recording security interests to establish priority and
protect the rights of lenders in international aviation transactions.
What is the significance of the Cape Town Convention?
✔✔The Cape Town Convention provides a legal framework for the registration and enforcement
of security interests in aircraft, facilitating international financing.
1
, How does a creditor enforce a security interest in aviation?
✔✔A creditor can enforce a security interest by repossessing the aircraft if the borrower defaults
on the loan, following legal procedures outlined in the security agreement.
What is the difference between a possessory and non-possessory security interest?
✔✔A possessory security interest involves holding the collateral, while a non-possessory
security interest allows the borrower to retain possession while securing the debt.
How do bankruptcy laws affect aviation security interests?
✔✔Bankruptcy laws can impact the enforcement of security interests, as creditors may need to
navigate automatic stays and the priority of claims against the debtor's assets.
What happens to a security interest if an aircraft is sold?
✔✔If an aircraft is sold, the security interest generally follows the aircraft unless the new owner
is a bona fide purchaser for value without notice of the security interest.
What is the purpose of filing a notice of security interest?
✔✔Filing a notice of security interest serves to publicly disclose the lender’s claim on the
aircraft, establishing priority over other creditors.
2
Questions and Answers | Latest Update |
2024/2025 | Graded A+
What is a security interest in aviation?
✔✔A security interest in aviation refers to a legal claim on an aircraft or related assets to secure
repayment of a loan or obligation.
How is a security interest created in aviation?
✔✔A security interest is created through a security agreement between the lender and borrower,
outlining the terms and the collateral involved.
What role does the International Registry play in aviation security interests?
✔✔The International Registry helps in recording security interests to establish priority and
protect the rights of lenders in international aviation transactions.
What is the significance of the Cape Town Convention?
✔✔The Cape Town Convention provides a legal framework for the registration and enforcement
of security interests in aircraft, facilitating international financing.
1
, How does a creditor enforce a security interest in aviation?
✔✔A creditor can enforce a security interest by repossessing the aircraft if the borrower defaults
on the loan, following legal procedures outlined in the security agreement.
What is the difference between a possessory and non-possessory security interest?
✔✔A possessory security interest involves holding the collateral, while a non-possessory
security interest allows the borrower to retain possession while securing the debt.
How do bankruptcy laws affect aviation security interests?
✔✔Bankruptcy laws can impact the enforcement of security interests, as creditors may need to
navigate automatic stays and the priority of claims against the debtor's assets.
What happens to a security interest if an aircraft is sold?
✔✔If an aircraft is sold, the security interest generally follows the aircraft unless the new owner
is a bona fide purchaser for value without notice of the security interest.
What is the purpose of filing a notice of security interest?
✔✔Filing a notice of security interest serves to publicly disclose the lender’s claim on the
aircraft, establishing priority over other creditors.
2
