In secured transactions, what do attachment and perfection mean?

• A. Attachment makes the security interest enforceable against the debtor; perfection gives priority against third parties.
• B. Attachment and perfection are identical.
• C. Perfection makes the security interest enforceable against the debtor; attachment gives priority against third parties.
• D. Attachment occurs after litigation.

Answer: (A)

Attachment and perfection differentiate two roles of a security interest. Attachment is what makes the security interest enforceable against the debtor—the creditor has a lawful right to repossess or otherwise enforce the collateral if the debtor defaults once the three ingredients are met: value given, the debtor has rights in the collateral, and a security agreement that describes the collateral. Perfection, on the other hand, is about standing up to other creditors; it gives the secured party priority against third parties, including other secured lenders and bankruptcy claimants, by methods like filing a financing statement, taking possession, or, for some types of collateral, exercising control. That’s why the statement is correct: attachment secures enforceability against the debtor, while perfection secures priority against third parties.