Add Conditional Fields Legal Texas Secured Transactions Forms For Free

Secured Transactions is the study of the system of secured lending—that is, lending against collateral—and how commercial law helps serve business and public needs.

A secured transaction is an agreement between two parties in which one of the parties gives property (other than real estate) as collateral, or security, for a loan.

The 5 secured transactions are nature of property that can be subject to a security interest, methods of creating the security interest, perfection of the security interest against claims of others, priorities among secured and unsecured creditors, and enforcement and enforcement remedies of the security interest.

There are five ways a creditor may perfect a security interest: (1) by filing a financing statement, (2) by taking or retaining possession of the collateral, (3) by taking control of the collateral, (4) by taking control temporarily as specified by the UCC, or (5) by taking control automatically.

The creditor with the highest priority will be repaid before others if the borrower defaults and foreclosure occurs. Three exceptions exist for filing for perfection: automatic redemption, possession, and taking control of a deposit account.

Three steps are required for attachment of a security interest: value has been given, the debtor has rights in the collateral or the power to transfer rights in the collateral to the secured party, and the debtor has signed or authenticated a security agreement that provides a description of the collateral.

There are three requirements for attachment: (1) the secured party gives value; (2) the debtor has rights in the collateral or the power to transfer rights in it to the secured party; (3) the parties have a security agreement “authenticated” (signed) by the debtor, or the creditor has possession of the collateral.

Let's briefly look at each of these requirements. Value is Given for the Security Interest. Debtor Has Rights in the Collateral. The Debtor Authenticates a Security Agreement. Filing a Financing Statement to Perfect the Security Interest. Possessing the Collateral to Perfect the Security Interest.

There are four primary ways in which an attached security interest may be perfected — filing, possession, control and automatic perfection. The most common method of perfecting a security interest is filing a financing statement.