Using IRAC, organize this issue into the various legal issues that arise, based on the concepts you just learned.

Michael and Holly are a newly married couple, who recently purchased their first home in Denver, Colorado. They purchased their first home for $500,000, using an FHA loan where they only had to put down a 3.2 percent down payment ($16,000). Their total mortgage liability is $484,000; with a 5% interest rate, their monthly payment is $3,556.55. Holly is the director of Human Resources at Starfleet, LLC, where she takes home approximately $10,000 a month. Michael is still searching for work.

Michael needs a new car so he can drive himself to job interviews and improv classes. He goes to the local dealership, Cars N More to purchase a used Chrysler Sebring. The Sebring is listed for $10,000; Michael has $1,000 for a down payment and must finance the remaining $9,000. Under his loan agreement with Cars N More, Michael must pay $392.83 a month for 24 months.

In addition to their home and Michael's new car, Michael has credit card debt of $20,000, the majority of which is multiple magic sets. Michael and Holly pay approximately $300 a month toward this debt. The rest of their expenses, which include food, utilities, and insurance, total $2,000 a month.

• How many secured transactions do Michael and Holly have? What makes them secured transactions?
• What rights does Cars N More (Michael's lender) have if Michael fails to pay the $392.83 monthly car payment?
• If Holly loses her job and only takes in $6,000 unemployment a month, is Chapter 7 bankruptcy an option to help alleviate their monthly expenses?