Asked by Isabella Garcia on Jun 07, 2024
Verified
What must a creditor do to become a secured party?
Secured Party
An individual or entity that holds an interest in a debtor's property as security for a debt, giving them claims over the property if the debt is not paid.
Creditor
An individual, organization, or entity to whom money is owed by a debtor.
Security Interest
A security interest is a legal right granted by a debtor to a creditor over the debtor's property as collateral for a loan.
- Understand the principles and attributes of purchase money security interests according to the Uniform Commercial Code.
- Scrutinize the privileges and duties of entities engaged in agreements safeguarded by personal property.
Verified Answer
ZK
Zybrea KnightJun 10, 2024
Final Answer :
To become a secured party,the creditor must gain a security interest in the collateral of the debtor.Three criteria must be met 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
- Understand the principles and attributes of purchase money security interests according to the Uniform Commercial Code.
- Scrutinize the privileges and duties of entities engaged in agreements safeguarded by personal property.