Perfection

Question 1

What is perfection?

Answer 1

Think of perfection as NOTICE to other parties who may make a loan to a debtor.

Question 2

Methods of Perfections

Answer 2

Fragrant Petunias Can Attract Ants (Filing, Possession, Control, Alternate Perfection system, Automatic perfection)

Question 3

Perfection rule statement

Answer 3

Perfection of a security interest is necessary for the secured party to have a superior right in the collateral. A security interest is perfected when the collateral attaches and the secured party complies with one of the methods of perfection. Those methods include filing a financing statement, having possession or control over the collateral, or it can be automatically perfected. When there are two or more perfected secured parties with rights in the same collateral, the first to file or perfect its security interest has priority. If both security interests are perfected, then priority dates from the time of filing or perfection, whichever occurs first.

Question 4

Filing

Answer 4

(most common) Creditor files with public office a financing statement that identifies the security interest and the collateral covered.

Question 5

Financing Statement should include

Answer 5

names of debtor, and secured party