Bay Marina borrows funds from Credit Union secured by Bay's interest in the marina. If Credit Union fails to perfect its claim to the collateral, the claim will be reduced to that of

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When a creditor fails to perfect its claim to collateral, it loses its priority over other secured creditors who have perfected their interests and becomes an unsecured creditor in relation to the collateral. This means the creditor does not have a direct claim to the specific asset for debt recovery.

Bay Marina Borrows Funds from Credit Union Secured by Bay's