Asked by Isabel Galvez on Jul 28, 2024
Verified
In a dispute between two secured parties with unperfected security interests,which of the following is true?
A) The party who attached its interest first will prevail.
B) The party who attached its interest second will prevail.
C) The parties must divide the proceeds evenly between them.
D) The party who loaned the most money on the collateral has priority.
E) The party who loaned the least money on the collateral has priority.
Unperfected Security Interests
A claim or lien on a debtor's property that has not met the legal requirements for enforceability against other creditors or in bankruptcy.
Secured Parties
Creditors that hold an interest in a debtor's collateral as security for the repayment of a loan or obligation.
Collateral
Collateral that a borrower offers to a lender to secure a loan or credit, which the lender can take possession of if the borrower fails to meet the repayment terms.
- Differentiate between perfected and unperfected security interests and the priorities among secured parties.
Verified Answer
AF
Ashlee FendallJul 30, 2024
Final Answer :
A
Explanation :
If neither party has perfected its security interest,the party that attached its security interest first will have first claim to the collateral.
Learning Objectives
- Differentiate between perfected and unperfected security interests and the priorities among secured parties.