Debtor is the person who owes payment or performance of the obligation that is secured. Security agreement is the agreement between the secured party and the debtor that creates the security interest. Collateral refers to the items of property in which a security interest is granted by the debtor. Perfection occurs when the steps required under the UCC are taken by the secured party in order that the security interest will be valid against creditors. Conflicting security interests refers to the condition when two or more secured parties have perfected security interests in the same collateral.
Priority is the term used to describe the superior rank of a security interest.
Subordination is an agreement between holders of conflicting security interests whereby the secured party with the superior security interest subordinates its interest to the secured party that would otherwise acquire an inferior priority position. Purchase money security interest can be obtained if all conditions under Section 9.107 and 9.312 have been met. Allows secured party to obtain a superior security interest in specific assets without regard to the existence of conflicting security interests. To be effective, a financing statement must be filed in the proper filing office in order to provide notice to third parties. The proper place to file a financing statement depends generally upon the nature, use, and location of collateral provided as security.