Asked by Abagail Marie Minnick on Jul 29, 2024
Verified
Set forth the steps that a creditor must take to become a secured party.
Secured Party
A lender or creditor who has a security interest in collateral owned by the debtor, which gives them a legal right to the property if the debtor defaults.
- Comprehend the notion of security interests and the process of their perfection in accordance with the Uniform Commercial Code (UCC).
Verified Answer
ZK
Zybrea KnightAug 01, 2024
Final Answer :
To become a secured party, the creditor must gain a security interest in the collateral of the debtor. The secured party must take the following three steps to create a security interest: (1) The two parties create a security agreement and either (a) there is a record of the security agreement (usually a written agreement that describes the collateral and is signed by the debtor) or (b) the secured party is in possession of the collateral; (2) The secured party must give value to get the security agreement; and (3) The debtor has a right in or to the collateral.
Learning Objectives
- Comprehend the notion of security interests and the process of their perfection in accordance with the Uniform Commercial Code (UCC).
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