First Federal Bank wants to perfect its security interest in the property of Global Services Company.The most common method of perfecting a se?curity interest is for
A)the creditor to file a financing statement in a public office.
B)the creditor to retain possession of the collateral.
C)the debtor to give value to the creditor.
D)the interest to attach automatically.

Question

Quizplus · Accepted Answer

Filing a financing statement in a public office is the most common and widely recognized method of perfecting a security interest. This statement puts third parties on notice of the creditor's interest in the property and establishes priority among other creditors. Retaining possession of collateral (B) is less common and may not be practical or feasible for certain types of property. Giving value (C) is a requirement for creating a security interest but does not automatically perfect it. While some security interests may attach automatically (D), they still need to be perfected through filing a financing statement in order to establish priority.

First Federal Bank Wants to Perfect Its Security Interest in the Property