What is Article 9 secured?

What is Article 9 secured?

Article 9 of the Uniform Commercial Code (UCC), as adopted by all fifty states, generally governs secured transactions where security interests are taken in personal property. It regulates creation and enforcement of security interests in movable property, intangible property, and fixtures.

Can you file a UCC against an individual?

In theory, anyone can file a UCC-1 against anyone else. To protect both secured creditors and debtors, Article 9 has strict requirements that must be met for a filed UCC-1 to be effective. One of those requirements is that the financing statement must be authorized by the debtor.

How do you enforce a security interest?

It is recommended that the security agreement include a provision giving the creditor a right to enter on the debtor’s premises and retake the collateral in the event of default. Second, the creditor can file a claim & delivery lawsuit and have a court order the property be turned over to the creditor.

Does Article 9 apply to leases?

True leases are not subject to Article 9, and true lessors do not need to file Article 9 financing statements or otherwise comply with Article 9. See U.C.C. § 1-201 (b)(35) (“[T]he right of a seller or lessor of goods under Article 2 or 2A to retain or acquire possession of the goods is not a ‘security interest.

Why do we need secured transactions?

Purpose of secured transactions A security interest promotes economic security because it provides the lender with the promise of repayment: if the borrower defaults on the loan, the lender should be able to recoup the loan amount by taking the agreed-upon asset used as collateral and selling it.

What are the three ways a security interest is attached?

The three requirements of: giving value, debtor rights in the collateral, and an authenticated security agreement apply to the most common types of collateral, such as equipment, inventory and even payments due under a contract.

How is an Article 9 security interest created?

In order for a security interest to be enforceable against the debtor and third parties, UCC Article 9 sets forth three requirements: Value must be provided in exchange for the collateral; the debtor must have rights in the collateral or the ability to convey rights in the collateral to a secured party; and either the …

How do I get rid of UCC?

If you need to remove a UCC filing form your credit report, ask the lender to file for its removal. In order to do this, they need to file a UCC-3 Financing Statement Amendment. You can also just wait it out. Depending on how long you have been with the lender, the filing may be removed within a few months.

What does UCC Article 9 cover?

PERFECTION OF SECURITY INTERESTS IN CHATTEL PAPER, DEPOSIT ACCOUNTS, DOCUMENTS, GOODS COVERED BY DOCUMENTS, INSTRUMENTS, INVESTMENT PROPERTY, LETTER-OF-CREDIT RIGHTS, AND MONEY; PERFECTION BY PERMISSIVE FILING; TEMPORARY PERFECTION WITHOUT FILING OR TRANSFER OF POSSESSION.