Illustrate Chattel Mortgages

Question

Illustrate Chattel Mortgages?

Answer 1

While in a conditional sale, the security is represented by the very goods themselves, in a chattel mortgage, the debtor may give security over a variety of personal property, even property acquired after the chattel mortgage has been executed. A chattel mortgagee (bank) has remedies similar to those of a conditional seller. It can sue on the covenant to pay, take possession of the goods and resell them, and sue the mortgagor (debtor) for any deficiency. As long as the goods remain in the mortgagee’s possession, the mortgagor may redeem them by paying the balance of the debt with interest and costs.