LAW 603 Chapter Notes - Chapter 23: Secured Loan, Security Interest, Gallium Arsenide
22 Jul 2016
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Security interest: allows a creditor to seize some of a debtor"s personal property if a debt is not repaid, usually without the delay and expense of going to court. A security interest gives the bank an advantage over an ordinary creditor. If the bank has a security interest on a truck, it is entitled to seize the collateral, dispose of it, and use the money it receives to pay off your debt. If the bank did not have a security interest, it would have to sue you for the unpaid debt and then get an order to seize your property. A security interest can be given over any type of property to any type of creditor. Collateral: is a property that is subject to a security interest (truck) If you need a bank loan (to buy a truck), the bank needs to see if you can actually pay it back.
