Self - Secured transaction (Priority: Conflicting secured interest rules,…
Self - Secured transaction
Secured interest: 2 steps
Step 1: Attachment
a security agreement
Value must be given
debtor has a right on collateral
Step 2: Perfection
By filling a financial statement
PMSI automatically perfected upon attachment
Perfection as to proceeds
automatically perfected proceeds for 20 days
Article 9 of UCC
Priority: Conflicting secured interest rules
YZ Notes :!!:
the security interest in the whole > has priority over the security interest in the accession
Perfected > prevails unperfected
A PMSI in equipment > has priority over conﬂicting security interests if the PMSI is perfected when the debtor receives possession of the goods (or within 20 days thereafter).
Secured vs Secured
the first to file or perfect
Secured party vs Buyer of the collateral
If you buy something with a security interest on it, the security interest stays on it. Exceptions
A buyer in the ordinary course of business (other than a person buying farm products from a person engaged in farming operations) takes free of a security interest.
Buyers not in the ordinary course of business take subject
to perfected security interests.
Secured party vs Judgment lien holder
An unperfected security interest is subordinate to the rights of a person
who becomes a lien creditor before the security interest is perfected. If the
security interest is perfected before the person becomes a lien creditor, the security interest has priority.
Unsecured vs unsecured
the first one to attach has priority