Text2 Perfection of a Security Interest

It is possible for a debtor to give many different creditors a security interest in the same goods. Nevertheless, the first creditor to perfect a security interest has priority over all the others. The first creditor is allowed to take as much of the proceeds from the sale of the collateral as necessary to completely satisfy the amount owed to him by the debtor. A perfected security interest results when the creditor gives proper notice of the existence of the security interest to all other potential creditors. Such notice may be given in a number of ways, for example, a creditor in possession of the collateral, as in a pledge.

When the debtor has the goods, it may be necessary for the creditor to file a financing statement to perfect the creditor’s interest.

A financing statement is a brief, written notice of the existence of a security agreement. It usually includes the names and addresses of both the debtor and the creditor, the signature of the debtor (and the creditor, as a rule) and the statement describing the items of collateral.

When tangible property is used as collateral, the procedure for perfecting the creditor’s security interest depends on whether the goods are consumer goods, farm products, inventory or equipment.

Goods can be in only one of these four classes at a given time. A security interest in one of the four classes of goods is perfected by filing or by taking possession of the goods upon default. Nevertheless, filing is not always required.

The second major classification of collateral, intangible property, represents real value in rights to money, goods, or contractual performance. Intangible property generally is evidenced by documents and writings. It includes the accounts receivable of a business, the rights to performance under a contract, bills of lading or air bills, warehouse receipts, commercial papers, and bonds or stocks.

As with tangible property, the procedure used in perfecting a security interest in intangible property varies with the classification of that property. A security interest in accounts receivable or contractual rights which cannot be possessed in a physical sense must be perfected by filing. For documents the creditor may either file a financing statement or take possession on the goods upon default.

Vocabulary

to perfect выполнять, завершать

to perfect security interest приобрести право удержания имущества за долги

perfected security interest защищенное имущественное право (когда кредитор владеет залогом)

proceeds доход, вырученная сумма

financing statement письменное заявление о наличии обеспеченного договора

inventory товарно-материальные запасы

warehouse receipt квитанция на товар, принятый на хранение; складская расписка

bill of lading накладная, коносамент

filing of a security interest подача заявки о наличии собственности, предложенной в качестве обеспечения

stock (certificate) акция

bonds облигации