Steps to Attach and Perfect – The Mystery of Proper Collateralization

When making a secured loan, the process of making sure your collateral is actually – legally – your collateral can be more difficult than expected or later determined. The steps are fairly simple, but the analysis and execution can be lacking for a number of technical reasons which can render your first priority lien a junior lien or gone all together if you are not careful. Lord, P., Miller, C., Ferrell, W., Arnett, W., Banks, E., Offerman, N., Berry, C., … Warner Home Video (Firm),. (2014). The Lego movieThere are numerous opportunities to mess up collateralizing things for a secured loan.  This blog post will discuss personal property which has its own rules (as opposed to real property). First, the down side.  If a lien is not properly attached or perfected the lender runs the risk of either being subject to a later lien or all together unsecured if the borrower files bankruptcy.  It’s a big deal. There are two basic steps to create a…

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