A secured transaction is created when a buyer or borrower (debtor) grants a seller or lender (creditor or secured party) a security interest in personal property (collateral). A security interest allows a creditor to repossess and sell the collateral if a debtor fails to pay a secured debt.
A secured transaction involves a sale on credit or lending money where a creditor is unwilling to accept the promise of a debtor to pay an obligation without some sort of collateral. The creditor requires the debtor to secure the obligation with collateral so that if the debtor does not pay as promised, the creditor can take the collateral, sell it, and apply the proceeds against the unpaid obligation of the debtor. A security interest is an interest in personal property or fixtures that secures payment or performance of an obligation. The property that is subject to the security interest is called the collateral. The party holding the security interest is called the secured party.
Arkansas Security Agreement in Accounts and Contract Rights is a legal document that establishes a creditor's security interest or lien on a debtor's accounts and contract rights. Under this agreement, the debtor grants the creditor rights and interests in their accounts receivable, contract rights, and other related assets as collateral to secure a loan or debt. This security interest ensures that the creditor has priority in receiving payment from the debtor's accounts and contract rights in case of default. Keywords related to Arkansas Security Agreement in Accounts and Contract Rights: 1. Security Agreement: The legal contract that outlines the rights and interests of the creditor in a debtor's accounts and contract rights as collateral. 2. Accounts Receivable: The money owed to a business for goods or services provided on credit, including unpaid invoices or customer payments. 3. Contract Rights: Legally enforceable rights arising from contractual agreements, such as rights to payment, performance, or damages. 4. Collateral: The assets pledged by a debtor to secure a loan or debt, ensuring that the creditor has a claim on those assets in case of default. 5. Lien: A legal claim or encumbrance on a debtor's property or assets, giving the creditor a right to satisfy their debt from the proceeds of the collateral. 6. Priority: The order in which creditors have rights to the debtor's assets or proceeds in case of default or liquidation. 7. Default: Failure to fulfill or meet the terms and obligations stated in the agreement, resulting in a breach of contract and allowing the creditor to take action to recover the debt. Types of Arkansas Security Agreement in Accounts and Contract Rights: 1. General Security Agreement: This type of agreement covers all the debtor's current and future accounts and contract rights, providing a broad security interest for all assets falling under these categories. 2. Specific Security Agreement: In this type, the agreement specifies certain accounts or contract rights that are being used as collateral, creating a narrower security interest for the specified assets. 3. Floating Lien Agreement: A floating lien agreement allows the security interest to cover future accounts and contract rights acquired by the debtor, providing flexibility for businesses with fluctuating or expanding portfolios. 4. Purchase Money Security Agreement: This agreement is used when a creditor provides financing for a purchase of specific assets, and the security interest is attached to those particular assets. It's important to consult a legal professional to understand the specific provisions and requirements for Arkansas Security Agreements in Accounts and Contract Rights as they can vary based on individual circumstances and legal interpretations.
