While most parties prefer to perfect a security interest by submitting the UCC-1 form, it is also possible to achieve perfection if the secure part has the warranties. The exception: detention does not apply to intangible property, such as claims. Given that many debtors prefer to continue to use or hold collateral, this approach is not common. The provision generally includes the sale or rental of the property held as collateral. This is often done through public auctions, but can also include a private sale. As in the case of forfeiture, the insured party must disclose the intention to surrender the security. Section 9 of the UCC provides for a large number of remedial measures for creditors seeking to recover losses resulting from defaulted loans or other transactions, including floating links that may also be included in securities contracts. This type of security rate may not be held by the debtor at the time of the securities contract. A floating pledge may include acquired property, the proceeds of the sale of the guarantee or in the future. A security agreement reduces the lender`s risk of default.
In order for a security interest to be attached to the security held by subsequent buyers, it must be perfected. If the security contract for a security purchase is of interest to consumer products, perfection is automatic. Otherwise, the lender must register either the agreement itself or a UCC-1 funding declaration in an appropriate public place (usually the Secretary of State or a public enterprise commission under that person`s control). The enhancement of interest creates constructive communication, considered legally sufficient to inform the rest of the world of the lender`s rights over guarantees. When a borrower has used the same property as the guarantees for several guarantee agreements with different lenders, the first lender to register the interest is most entitled to that property. Often, when filing a UCC-1 funding statement, the primary wish of an insured party is to have priority over other safe parties. In the absence of a funding statement, the development of a guaranteed interest rate does not necessarily give the party total priority over other third parties. If the correct perfection is not achieved, the creditor can obtain the status of “unsecured creditor” in the event of bankruptcy. See No. 9-102 (2) and 9-310 code. Article 9 contains a fraud status that imposes a written guarantee contract, unless it is mortgaged. See code point 9-203 (1).
A mortgaged guarantee agreement is entered into when the borrower transfers the guarantee to the lender for a loan (for example. B a pawnbroker). The “perfection” of a security agreement allows an insured party to get priority over third-party guarantees. To complete a security agreement, it is usually necessary to submit a public notice. See 9-302 – 9-305 code. An often confusing term “perfect” in a security agreement does not mean that the document is error-free. On the contrary, a “perfect” security contract ensures that an insured party can claim promised guarantees in the event that the debtor declares bankruptcy. A wide variety of material and intangible goods can be used as collateral.