How does priority work in security agreements?

Often, multiple parties will have interest in an individual's or organization's property. Generally, the first secured party to achieve perfection is granted priority interest in the debtor's collateral; hence the popularity of filing a financing statement, which quickly grants perfection while also putting other secured parties on notice of a given creditor's priority position.

Those with security interest may be referred to as the "first secured party," "second secured party," and so on, depending on when and how perfection of the security interest was achieved.

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