Asked by Tania Zamora on Jul 25, 2024
Verified
When two or more parties have unperfected security interests in the same collateral,the first to attach prevails over the other parties.
Unperfected Security Interests
A security interest in collateral that has not been properly filed or recorded, leaving it vulnerable to claims by other creditors.
Collateral
An asset or property that a borrower offers to a lender as security for a loan, which can be seized if the loan is not repaid.
- Understand the hierarchy of regulations when dealing with conflicting interests.
Verified Answer
GC
Gavin CagleJul 26, 2024
Final Answer :
True
Explanation :
This is known as the "first to attach" rule, which means that the party who attaches first (by filing or perfecting their security interest) will have priority over later parties with unperfected security interests in the same collateral.
Learning Objectives
- Understand the hierarchy of regulations when dealing with conflicting interests.