Possession Can Perfect Security Interest in Collateral Vehicle

When repossessing a property from a debtor, having a perfected security interest in the property helps you prevent other interested parties from gaining possession of it. According to the Uniform Commercial Code, a security interest is created when: The property has been given value; The debtor has a right to the property; and The debtor agrees that the creditor shall attach a security interest to the property. The security interest gives the creditor the right to possess the property if the debtor cannot meet the debt obligation, and perfecting the security interest gives the creditor priority over other parties who may claim ownership of the property. A recorded financing statement is a common means of perfecting a security interest. However, actual possession of the property can be sufficient with properties such as vehicles. Recent Example In the case of Malek v. Gold Coast Exotic Imports LLC, an Illinois appellate court ruled that a car dealership had a perfected…

Read more detail on Recent Banking and Finance Law posts –

This entry was posted in Banking and Finance law and tagged , , , , , . Bookmark the permalink.

Leave a Reply