Attachment of the Security Interest

Question 1

How is a security interst created?

Answer 1

Attachment is how a security interest is created. Once a security interest attaches, it become enforceable.

Question 2

What is required for a valid attachment?

Answer 2

A valid attachment requires that:

1. There is a valid security agreement memorializing the security interest;
2. The debtor possess rights in the collateral; AND
3. The creditor extends value to the debtor (almost any consideration will suffice.)

Question 3

What must be done for a security agreement to become valid?

Answer 3

Generally, the debtor must authenticate the security agreement by providing the creditor with a reasonable description of the collateral in writing.

and

It must be signed (signature, thumbprint etc.)

Question 4

What type of right must the debtor have in collateral?

Answer 4

The debtor must have a rights beyond mere possession, however, the debtor need not possess good title to the property (e.g., the debtor may be a lessee of the property).