Attachment

Question 1

What is attachment?

Answer 1

The process by which the security interest is created

Question 2

When does the security interest attach?

Answer 2

When:

(1) the secured party gives value;
(2) the debtor has rights in the collateral; AND
(3) the debtor has authenticated a security agreement that sufficiently describes the collateral

Question 3

For attachment purposes, when is a collateral description sufficient?

Answer 3

If it reasonably identifies what is described. Usually, a description using UCC terms is sufficient.
However, a description by type is not sufficient if the collateral is consumer goods and the transaction is a consumer transaction.

Question 4

For attachment purposes, when is a collateral description insufficient?

Answer 4

A super generic description, like “all of the debtor’s property”

Question 5

How do you create a security interest in after-acquired collateral?

Answer 5

The security agreement must usually provide for it

Question 6

How does a security interest in inventory or accounts receivable deal with after-acquired collateral?

Answer 6

A security agreement specifying an interest in inventory or accounts receivable creates an interest in after acquired collateral even without an “after-acquired property clause”

Question 7

How do you create a security interest in after-acquired consumer goods?

Answer 7

Requires that the debtor acquire rights in the consumer goods within 10 days of the secured party giving value

Question 8

How is a security interest in identifiable proceeds created?

Answer 8

A security interest in collateral automatically extends to identifiable proceeds of the collateral