A security interest is enforceable only if the collateral is in the secured party's possession.

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A security interest can be enforceable even if the collateral is not in the secured party's possession. They can gain a security interest through attachment, which is the agreement between the debtor and secured party, and then perfect the security interest by filing a financing statement with the appropriate state agency. Possession may be required for certain types of collateral, such as autos or inventory, but it is not a universal requirement.

A Security Interest Is Enforceable Only If the Collateral Is