ExpertHard1 markMultiple Choice
CPA · Question 63 · Area II: Business Law
Under the UCC Secured Transactions Article, which of the following is required for the 'attachment' of a security interest?
Under the UCC Secured Transactions Article, which of the following is required for the 'attachment' of a security interest?
Answer options:
A.
Filing a financing statement.
B.
The debtor must be insolvent.
C.
The creditor must take possession of the collateral.
D.
The debtor must have rights in the collateral.
How to approach this question
Attachment Requirements (VRD): Value given, Rights in collateral (Debtor), Description (Agreement) or Possession.
Full Answer
D.The debtor must have rights in the collateral.✓ Correct
Attachment requires three elements: (1) Value given by creditor, (2) Rights in collateral held by debtor, and (3) Authenticated security agreement or possession/control of collateral.
Common mistakes
Confusing Attachment (creation of right against debtor) with Perfection (creation of right against third parties/filing).
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