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UCC Article 9: Secured Transactions – Summary

UCC Article 9: Secured Transactions – Summary

US Capital Private Bank Knowledge Base

What is UCC Article 9?

UCC Article 9 is a section of the Uniform Commercial Code (UCC) adopted by all 50 states in the U.S. It governs secured transactions, which involve a debtor giving a creditor a security interest in personal property or fixtures to secure repayment of a debt or performance of an obligation.

Key Concepts of UCC Article 9

  • Security Interest: A legal claim or lien on collateral that has been pledged to secure a loan or other obligation.

  • Collateral: Personal property or fixtures subject to a security interest. This can include equipment, inventory, accounts receivable, vehicles, and other tangible or intangible assets.

  • Debtor: The party who owes payment or performance of an obligation and grants a security interest in their collateral.

  • Secured Party: The lender or creditor holding the security interest.

Purpose

UCC Article 9 facilitates lending and commerce by allowing creditors to secure interests in debtors’ assets, ensuring a means of repayment if the debtor defaults.

Perfection of Security Interests

  • Perfection is the process by which a secured party gives public notice of its interest, usually by filing a UCC-1 Financing Statement with the appropriate government office (typically the Secretary of State).

  • Perfection establishes priority against other creditors and third parties.

Priority Rules

  • The first secured party to perfect their security interest generally has the highest priority.

  • Specific rules govern priorities between conflicting claims, purchase money security interests (PMSIs), and buyers of collateral.

Default and Enforcement

  • Upon default by the debtor (failure to pay or perform), the secured party may repossess and sell or otherwise dispose of the collateral.

  • The secured party must act in a commercially reasonable manner during disposition.

Important Legal Implications

  • UCC Article 9 applies only to personal property and fixtures, not to real estate itself.

  • It does not cover security interests created by statute or certain other specific arrangements (like landlord liens).

  • Both parties must carefully draft security agreements to comply with UCC requirements and protect their interests.

Relation to Sovereignty and Divine Law Trusts

At US Capital Private Bank, operating under the Divine Law Trust structure, it is critical to understand the distinction between the legal entity (such as a corporation or trust) and the natural person or sovereign individual. UCC Article 9 primarily governs interests in created legal entities and commercial assets, not the sovereign rights of the natural person.

Where to Learn More

  • Full text of UCC Article 9 is available at your state's legislative website or through the Uniform Law Commission: uniformlaws.org

  • For deep legal resources and free educational materials, visit SEDM.org

Contact US Capital Private Bank for Guidance

If you need professional advice on secured transactions, trust structures, or protecting your sovereignty while engaging in commerce, contact us:

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