A security interest is an interest in property that secures the performance of an obligation by one party to another, such as the payment of a debt.
Security interests can be granted in nearly any type of property, including presently owned or even after-acquired property.
A security interest is usually created by a written agreement. The agreement generally requires:
A security interest is enforceable when it "attaches" to the collateral. Attachment occurs when:
If the debtor defaults, the secured creditor may:
Third parties may have an interest in the collateral. If so, "perfection" determines the secured creditor’s rights with respect to third parties.
Different types of collateral have different requirements for perfection. In general, a security interest is perfected when (1) it attaches and (2) one or more of the following occurs:
The general rules for priority are:
Should I Seek an Experienced Attorney?
Whether you would like to enter a security agreement or need to enforce your agreement, an experienced business lawyer or real estate lawyer can aid you in protecting or exercising your property rights.
Last Modified: 05-27-2014 04:02 PM PDTLaw Library Disclaimer
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