Article 9 Scope

Question 1

What does Article 9 apply to?

Answer 1

Article 9 applies to consensual security interests in personalty or fixtures.

Personalty is goods! Applies only to voluntary or consensual collateralizations - not to statutory or mechanics liens.

Question 2

Who is the debtor?

Answer 2

The entity or person who ows the money.

Question 3

Who is the secured party or secured creditor?

Answer 3

An entity who lends the money.

Question 4

What is the security agreement?

Answer 4

Contract or record

Question 5

What is the security interest?

Answer 5

The right creditor has in debtor’s personalty or fixtures.

Question 6

What is collateral? What could collateral be?

What test is used to classify tangible collateral?

Answer 6

The personalty or fixtures creditor can look to for satisfaction.

The collateral could be:

1. Tangible collateral or goods:
   a. consumer goods: those items used for personal or familial purposes.
   b. equipment: items used in business.
   c. inventory: goods held for sale or lease
   d. farm products
   e. fixtures: items annexed to realty.

OR

2. Intangibles or semi-intangibles, such as: patents, trademarks, copryights (IP) OR stocks, bonds, mutual funds, including proceeds from sale of collateral or account/right to payment, promissory notes, and drafts.

The key for purposes of classifying tangible collateral is the primary use in the hands of your debtor.