Perfection

Question 1

Perfection of goods - general rule

Answer 1

To obtain rights against another claimant to a debtor’s collateral, a secured party must also perfect its security interest. A creditor can perfect a security interest in goods by:

1. filing, in the proper public office, a financing statement that is authorized by the debtor in an authenticated record, or
2. by taking possession.

Question 2

Perfection of a PMSI in consumer goods

Answer 2

A PMSI in consumer goods is automatically perfected upon attachment.

Question 3

Perfection of a security interest in vehicles

Answer 3

Under Article 9, filing a financing statement is not effective to perfect a security interest in vehicles subject to a state statute that provides for perfection by notation on the certificate of title.

Question 4

Perfection by filing - general rule

Answer 4

Perfection can occur by the filing of a financing statement for all kinds of collateral except deposit accounts and money. For collateral other than real estate, a financing statement is filed centrally with the secretary of state. The financing statement must contain:
1. the name and mailing address of the debtor,
2, the name and address of the secured party, and
3. an indication of the collateral covered by the financing statement.
The financing statement is ineffective if it contains any seriously misleading errors. If the debtor is a registered organization, the debtor’s name will be considered seriously misleading if it does not match the name on the debtor’s public record. Use of the debtor’s trade name is insufficient. An incorrect name will not be treated as seriously misleading if the financing statement would be discovered in a filing office search under the debtor’s correct name.

Question 5

Perfection for security interest in small-scale assignments of an account or payment intangible

Answer 5

Perfection may occur without filing for security interests in a small-scale assignment of an account or payment intangible that does not alone transfer a significant part of the assignor’s outstanding accounts or payment intangibles to the creditor.

Question 6

Perfection for a nonconsumer deposit account

Answer 6

A security interest may be perfected by filing as to all kinds of collateral except deposit accounts and money. A security interest in a nonconsumer deposit account is perfected by control. The bank in which the nonconsumer deposit account is maintained automatically has control over a deposit account. Other means of gaining control are:

1. putting the deposit account in the name of the secured party; or
2. agreeing in an authenticated record with the debtor and bank in which the deposit account is maintained that the bank will comply with the secured party’s orders regarding the account without the debtor’s further consent.