Definition 1: an interest in property that exists by contract as security for payment or performance of an obligation <the security interest of a mortgagee in the mortgaged property> also : See also lien While a lien may be created by statutory or judicial means without any agreement providing for security (as in the case of a tax lien or judgment lien), a security interest and lien may inhere in the same claim, as when a mortgage comprises both a lien on and security interest in the mortgaged property. 2: an interest in personal property or fixtures created by a security agreement that secures payment or performance of an obligation <the creditor had a security interest in the inventory and accounts receivable of the business> see also attach perfect purchase money security interest in this entry Security interests in personal property are governed by Article 9 of the Uniform Commercial Code. The security interest set out in Article 9 largely replaces the traditional devices for security, such as the pledge and chattel mortgage. A security interest in property that has attached enables a creditor to obtain satisfaction of a debt out of the property without the need to obtain a judgment in court and levy on the property. Further, it provides the creditor with priority over competing claims against the property.
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