Simple English definitions for legal terms
Read a random definition: family allowance
A perfected security interest is a type of property interest that is created to ensure that a debt is repaid. It is considered "perfected" when it meets all the legal requirements to have priority over other creditors, including those in bankruptcy. This means that the creditor with a perfected security interest has the right to take possession of the property securing the debt if the debtor fails to repay. On the other hand, an unperfected security interest does not have priority over other creditors and only has priority over the debtor. A purchase-money security interest is a type of perfected security interest that is created when a buyer uses a lender's money to make a purchase and immediately gives the lender security.
A perfected security interest is a legal term that refers to a property interest created by an agreement or by operation of law to secure performance of an obligation, especially repayment of a debt. It is a security interest that complies with the statutory requirements for achieving priority over a trustee in bankruptcy and unperfected interests. A perfected interest may also have priority over another interest that was perfected later in time.
These examples illustrate how a perfected security interest can provide a creditor with priority over other creditors in the event of bankruptcy or default by the debtor. It is important for creditors to ensure that their security interests are perfected in order to protect their interests in the collateral.