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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 main point of Article 9 is to be a secured creditor: If a creditor is secured it has a claim in something of the buyer's (the goods exchanged for future payment or other collateral). UCC Article 9 for Dummies - National Association of Credit Management National Association of Credit Management ? nacm-blog ? 3114-ucc-article-9-for-d... National Association of Credit Management ? nacm-blog ? 3114-ucc-article-9-for-d...

Under the rule for attachment, there are three requirements: (1) security agreement (though can have possession or control), (2) value (consideration), and (3) the debtor has to have rights in the collateral. Here, as with the above two questions, there is both value given and the debtor has rights in the collateral.

This is done in the security agreement. The financing statement gives notice to the world that the secured creditor has a security interest in the collateral described in the statement. Filing of the financing statement is usually required to perfect the creditor's interest in inventory or the proceeds.

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.

Perfection is the process by which a secured party gains priority over other parties with claims to the same collateral. This usually involves filing a public notice, such as a financing statement, with the appropriate government office (see §§ 9-302 - 9-305 of the UCC).

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.

Accounts Receivable It is not possible to ?see and touch? an account receivable. Therefore, most lenders perfect a security interest in receivables by filing a financing statement.

inventory PMSI is perfected by filing a UCC1 prior to the debtor taking possession of the assets or within 20 days after receipt. This must be done in the appropriate jurisdiction where the debtor is located.