What Is A Purchase Money Security Agreement
If z.B. an UCC3 allocation of a secure part has been submitted to secure part two, it is important to understand that the allocation of UCC3 does not attribute the security interest. It has only one right to change the funding plan. In fact, a saved part is added when assigning to UCC records. The beneficiary of the allowance is not removed. That is why it is important for both parties to receive communication. But wait, there are others! The security interests of the purchase money may also be taken into account if the creditors do not follow the precise legal procedure to obtain such a security interest. They can also be traps for existing creditors who do not control their guarantees. If the existing creditors are not conscientious, it is possible that all of the debtor`s assets were in fact mortgaged to a new lender and that the existing creditor`s security was sold to render an unsecured credit! And the most fundamental concept about the security interests of buying money is that it is a priority, it is the priority. The priority now is the order in which conflicting claims on the same guarantees are resolved. Finally, debtors often grant security interests in the same guarantees to different parties, and the courts need an orderly means of clarifying the situation in the event of debtor insolvency. And that`s the priority.
The priority, therefore, is how these conflicting claims are met, and how this happens is based on a rule from first to line. 1. The guarantee of the purchase money also guarantees a bond that is not an obligation to purchase; (2) “obligation to purchase”: a debtor`s obligation, which must be considered as part or part of the price of the guarantee or at the debtor`s value, in order to allow the debtor to acquire rights to or use the guarantee when the value is actually used. To establish a PMSI, the UCC requires a “close link” between the acquisition of security and the guaranteed commitment. A discrepancy between the acquisition of the guarantee and the guarantee of the debt associated with it will prevent the finding of a “close relationship”. For example, when a buyer buys property with cash, later obtains a loan from a lender and grants a security interest to those products to secure the loan, the lender`s security interest would not be a PMSI. Ancillary obligations, such as interest, late fees, installation costs, insurance and other “security acquisition fee charges,” are generally “closely related.” Now I`ll go on and talk about the perfection of the security interests of buying money. Security interests of buying money, with one exception, will always be perfected by submission. When it comes to the bid, a funding return is filed, a UCC funding return.
Yes, and the reason is that without the new loan, the debtor would never have acquired rights to the guarantees. So, basically, no harm, no fault. From a debtor`s perspective, a security interest on the purchase may allow the debtor to extend his borrowing capacity (and thus his assets) by allowing the debtor to borrow against specially acquired assets.