Once „perfected,” a creditor is able to claim or recover the collateral that provides the credit when a customer is in late payment. There are many other rules that are set out in the UCC to regulate the collection process. And that brings us to the „priority rules.” Finally, we will find that, although the enhanced security interests, and especially the security interests of the purchase money, are a high priority, no one has a higher priority than a buyer in normal business who buys the guarantees, without knowing the security interests for personal use. [39] This protects, for example, shoppers in department stores. Otherwise, a bank with a security interest in a department store coat could retrieve its buyer`s coat. The disruption that would lead to trading led the UCC to protect the buyer in normal. However, the situation is complicated by the fact that many legal systems use both interchangeably. A real estate value granted by a debtor for a given asset in a given country may be recorded against the debtor, against the assets, both or both. [12] Secure transactions are essential to a company`s growth.

Almost all individuals and organizations need to take on debts at some point, but attracting creditors on board can be a struggle. Security interests ensure the security of the creditor, who then provides a particular debtor with the means he or she needs most. In addition, the debtor is more likely to obtain a low interest rate if the creditor has some form of guarantee. Security agreements play a central role in this agreement by outlining the conditions under which debts can be guaranteed and what happens in the event of default by the debtor. Several methods can be used to enhance a security interest. Most debtors and creditors file financing returns, but some have alternatives. The main options for perfecting a security interest are listed below. While the granting of an interest rate gives a creditor rights to confiscate the guarantee, the development of a securities interest rate gives the creditor higher rights over other creditors. The development of an interest in securities leads the world to „think” about a burden on collateral and warns future creditors who are attempting to recover a debtor through another creditor with a higher security interest. The method of perfection of an interest in securities depends on the nature of the collateral taken. A security interest in most personal property is enhanced by the filing of a UCC-1 form in the designated office of the state government – in Alabama, which is the office of the Minister of Foreign Affairs. However, for certified warranties such as cars, trucks and motorcycles, the interest in safety is reinforced by the interest of safety on the title of the vehicle.

This is often done by the Motor Vehicle Department or the Revenue Department in a state. Perfection through possession, however, is not always practical. For example, if the insured party has a security interest in the debtor`s „material,” the secured party cannot own it because the debtor needs his equipment to do his business. It is obviously not practical for the lender of a car loan to be perfected by possession for similar reasons. In most legal systems, the need for perfection is only for security interests that are proprietary in nature (for example. B a mortgage or a fair levy). Other rules that constitute security in the casual sense of the word —, for example. B securitization agreements, leasing and leasing, — should not be perfected in the legal sense.