Bob's Barber Shop borrows from first Credit Company and then Debit Loans LLC, using the same property as collateral for both loans. Debit Loans perfects its security interest. Credit Company does not. The debtor defaults on both loans. The party with first rights to the collateral is
A)Credit Company.
B)Debit Loans LLC.
C)Credit and Debit in proportion to the outstanding value of their loans.
D)Bob's Barber Shop.

Question

Quizplus · Accepted Answer

Debit Loans LLC has first rights to the collateral because they perfected their security interest, giving them priority over Credit Company, which did not perfect its interest.

Bob's Barber Shop Borrows from First Credit Company and Then