Classification of Collateral

Question 1

How collateral is classified generally

Answer 1

Collateral is categorized based on the primary use to which the debtor puts it at the time of attachment.

Question 2

Consumer goods

Answer 2

Consumer goods are those that are used or bought for personal, family, or household purposes.

Question 3

Equipment

Answer 3

Goods that are not consumer goods, farm products, or inventory are equipment.

Question 4

Accessions

Answer 4

Goods that are physically united with other goods in such a manner that the identity of the original goods is not lost.

Question 5

Inventory

Answer 5

Inventory is goods held for sale or lease, goods that are to be furnished under service contracts, and materials used or consumed in a business in a short period of time.