Attachment

Question 1

Attachment Generally

Answer 1

Attachment gives the creditor rights against the debtor in the collateral. To attach a security interest, 1) an authorized security agreement must describe the collateral or the creditor must take possession or control of the collateral, 2) the creditor must give value, and 3) the debtor has rights in the collateral.

Question 2

After Acquired Property

Answer 2

Generally, unless there is an after-acquired property clause in the security agreement, the secured party’s interest is only in the collateral the debtor had rights in at the time it signed the agreement.

Question 3

Exceptions to No Interest in After Acquired Property

Answer 3

• An exception to this rule is where the collateral is the type that will regularly deplete and replenish.
• An exception to this rule is for consumer goods, unless the debtor acquires rights in the goods within 10 days after the creditor gives value.
• After acquired property clauses do not apply to commercial tort claims.
• An exception to this rule is where security interest will automatically attach to the identifiable proceeds of the collateral. Proceeds are identifiable when they can be traced back to the original collateral.