Perfection of the security interest

Question 1

Perfection

Answer 1

Once a security interest attached, it is enforceable, perfection of the interest only enhances the secured party’s rights to the property serving as collateral

Question 2

Methods in which a security interest may be perfected

Answer 2

Filing - The filing of a “financing statement” or the security agreement with the state is a primary method of perfection.

(2) taking possession - A secured party may perfect a security interest in negotiable document, goods, instruments, or money by taking mere possession of each items
(3) Automatic perfection - certain security interests are perfected automatically when they attach.

Question 3

Filing

Answer 3

The filing of a “financing statement” or the security agreement with the state is a primary method of perfection. The filing MUST be filed by an authorized party. Minor error will not invalidate the financing statement unless the error makes it seriously misleading.

The Filing must contain :

(a) The debtor’s name;
(i) if the debtor is a registered organization, the financing statement must provide the official registered name of the organization.
(b) the secured party’s name;
(c) An adequate description of the collateral; AND
(d) The filing fee

Question 4

Automatic perfection

Answer 4

The following security interests are perfected automatically when they attach:

(a) A purchase money-security interest in consumer goods; AND
(b) An assignment of accounts which does NOT by itself or in conjunction with other assignments to the same assignee transfer a significant part of the assignor’s outstanding accounts