ATTACHMENT (Creation)

Question 1

Attachment Generally

Answer 1

A security interest that’s enforceable against the debtor is said to have attached

Attachment refers to creditor’s lien attaching to collateral

Creditor has rights against debtor

Question 2

Attachment Definition/Elements

Answer 2

Attachment occurs when:
(1) Creditor gives value (loan);
(2) Debtor has interest/rights in collateral; AND
(3) Debtor authenticates (signs) security agreement OR creditor takes possession of collateral

Question 3

Authentication

Answer 3

AID (gotta be in writing to satisfy SoF)
1. Authenticated in in record that’s in tangible medium;
2. Shows intent to to create security agreement
3. Description of collateral

Question 4

After-Acquired Property Clause

Answer 4

Creates security interest not only in current collateral but also in collateral debtor acquires in the future.

Attaches as soon as debtor gets interest in collateral

Question 5

After-Acquired Clause Exception

Answer 5

Doesn’t apply to:

1. Torts
2. Consumer goods unless goods acquired w/I 10 days after secured party gave value

Question 6

Future Advances

Answer 6

Provides that collateral will secure any future advances (additional loans) given by secured party

Question 7

Proceeds

Answer 7

Anything given in exchange for collateral as a result of the debtor’s rights in the collateral;

Security interest will automatically attach to identifiable proceeds;