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Difference between revisions of "Creditors' Remedies against Debtors (10:III)"
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Creditors' Remedies against Debtors (10:III) (view source)
Revision as of 21:44, 2 October 2022
, 21:44, 2 October 2022→4. Perfection
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For a creditor’s interest in a good to be practically effective, s 35(1)(b) of the ''PPSA'' states that the interest must be “perfected”, whereby the creditor becomes a “secured” party. By virtue of s 19, a security interest must satisfy two conditions to be “perfected”: | For a creditor’s interest in a good to be practically effective, s 35(1)(b) of the ''PPSA'' states that the interest must be “perfected”, whereby the creditor becomes a “secured” party. By virtue of s 19, a security interest must satisfy two conditions to be “perfected”: | ||
:i) the security interest must have “attached” (see below); and | |||
:ii) the secured party must ensure that “all steps required for perfection under this Act have been completed” (see below). | |||
In general, attachment will ensure that the security interest is enforceable against the debtor, while perfection will protect the security interest against competing third party claims. | In general, attachment will ensure that the security interest is enforceable against the debtor, while perfection will protect the security interest against competing third party claims. | ||
“Attachment”: Section 12 states that a security interest attaches to the good when: | “Attachment”: Section 12 states that a security interest attaches to the good when: | ||
:i) value is given; | |||
:ii) the debtor has rights in the collateral; and | |||
:iii) except for the purpose of enforcing rights between the parties to the security agreement, the security interest becomes enforceable under s 10 (unless the parties specifically agreed to postpone the time for attachment in which case the security interest will attach at the time specified in the agreement). | |||
=== a) Methods of Perfection === | === a) Methods of Perfection === | ||