You are the chief executive officer of Money Games Inc.(MGI), which has begun to market Borrow & Spend, a video game set in the world of finance. To buy ads, MGI borrows $50,000 from First Savings Bank. On MGI's behalf, you sign a note for the loan and offer its accounts receivable as collateral. You sign a security agreement that describes the collateral. The bank does not file a financing statement.
Has the banks security interest attached?
If so, when?
Yes the security interest has attached. It became effective as soon as it was signed. This is because a written securiy agreement wassed to create a security interest, in which the agreement was signed by the chief executive officicer, in the agreement it contained a description of the collateral, and the collateral was identified. Now that the requirements have been met, the creditor's rights attach to the collateral. This means that the creditor has a security interest against the debtor that is enforceable. The attachment ensures that the security interest between the debator and the secured party is effective
