Asked by Anthony Amaya on Jul 29, 2024
Verified
In a dispute between a secured perfected creditor and a secured unperfected creditor for claim to collateral,the secured perfected creditor would be the prevailing party.
Secured Perfected Creditor
A lender that has a legal right to take possession of the collateral if the borrower fails to fulfill the repayment obligations.
Collateral
Property or assets pledged as security for the repayment of a loan, subject to seizure on default.
Secured Unperfected Creditor
A creditor that has a security interest in the debtor's property but has not completed all legal steps or filings to perfect the claim.
- Identify the distinctions between perfected and unperfected security interests and their impact on the ranking of creditors.
Verified Answer
ZK
Zybrea KnightAug 01, 2024
Final Answer :
True
Explanation :
If both creditors are secured,the determination of priority for claim to collateral is based on time and perfection.According to Uniform Commercial Code Section 9-317,the party that perfected its interest first will have priority in claim to the collateral.
Learning Objectives
- Identify the distinctions between perfected and unperfected security interests and their impact on the ranking of creditors.