Explain the difference between attachment and perfection

Answer 1

A security interest has to attach to the collateral before the legal relationship between the secured party, the debtor, and the debtor's collateral is created. Attachment means that the secured party has taken all of the following steps to create and enforceable security interest: (1) the secured party and the debtor make a security agreement and either the debtor has authenticated a security agreement describing the collateral or the secured party has obtained possession or control of the collateral; (2) the secured party has given value to obtain the security agreement, and (3)the debtor has rights in the collateral. Attachment protects against the debtor. Perfection of a security interest protects the secured party against parties other than the debtor. Perfection means letting the rest of the world know that the secured party claims a security interest in the debtor's collateral promised under the attachment. The most common way to perfect is by filing a financing statement with the appropriate state agency. A valid security interest can be created even though the interest is never perfected.