When a creditor sells a consumer good to a debtor on a credit basis or a creditor extends a loan to a debtor for the purchase of a consumer goods,the security interest does not perfect automatically; instead,the secured party must file a financing statement in order for the security interest to perfect.

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Under the Uniform Commercial Code,a consumer good is a good used or bought for use primarily for personal,family,or household purposes.When a creditor sells a consumer good to a debtor on a credit basis or a creditor extends a loan to a debtor for the purchase of a consumer goods,the security interest in the good perfects automatically.If an item is purchased for business use,the security interest would not perfect automatically; instead,the secured party would have to file a financing statement.

When a Creditor Sells a Consumer Good to a Debtor