Collateral

CAR AND DEALER
Civil Litigation
Eric Gros-Dubois

Financing a Vehicle – Liens & Auto Equity Loans

When a vehicle is financed through a bank, the bank becomes a “secured party” in relations to the vehicle. This means that the bank now owns a financial interest in the vehicle, secured by the vehicle itself. Therefore, the information about the bank’s interest in the vehicle has to be put on the certificate of title, along with the borrower’s information.

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Business Law
Eric Gros-Dubois

Perfecting the Security Interest

A secured party should perfect their security interest, after attachment, in order to fully ensure its legal rights against a third party claiming that they have an interest in the same collateral. By perfecting a security interest, a secured party gains priority over subsequent creditors claiming the same collateral.

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Business Law
Eric Gros-Dubois

What is a Security Interest?

A security interest occurs when a debtor, which can be a person or business, borrows money from a creditor or more specifically a secured party and they agree to execute a security agreement. In the event the debtor defaults by not paying back the loan or by violating a provision in the agreement, the secured party can seize the collateral and may sell it to satisfy the debt.

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The Entrepreneur's Handbook

This is a quick legal reference guide covering 16 topics that every business owner needs to have to start a business