Article 9 of the Uniform Commercial Code sets forth a statutory scheme for both creating and enforcing security interests in personal property. Pursuant to Article 9, a lender seeking to collateralize an advance on the personal property of its debtor may negotiate and memorialize its security interest in an agreement, perfect its position as a secured lender relative to other interests in the property, and enforce its security interest by repossessing and disposing of the property securing its loan if its debtor defaults on the loan.
Like the rest of the UCC, Article 9 is intended to create a uniform system across the country for creating and enforcing security interests. It must be noted, however, that while Article 9 has been adopted by every state, some states have made minor modifications to the law or have adopted the most recent version of the law. Accordingly, it is important to consult local law whenever conducting a sale under Article 9.
Originally Published on Law360, New York - April 30, 2014.
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