Article 9

DEFINITION of 'Article 9'

An article under the Uniform Commercial Code (UCC) that governs secured transactions. Article 9 encompasses a wide variety of possessory liens and determines the legal right of ownership if a debtor does not meet his or her obligations.

In 2002, Article 9 was revised to substantially modernize and expand the scope of what can be used as collateral to include credit card receivables, electronic chattel paper, accounts receivable and business inventory.

BREAKING DOWN 'Article 9'

Although Article 9 goes into great detail to incorporate the many loans secured by various types of collateral, there are still many disputes over who has ownership priority of an asset subject to a security interest transaction.

For example, suppose that George brings his computer to be serviced by Mike. Upon completing the repairs, George does not have the funds to pay Mike. In this case, Article 9 states that Mike may keep the computer until payment is received.

RELATED TERMS
  1. Uniform Commercial Code

    A standard set of business laws that regulate financial contracts. ...
  2. Chattel

    Personal property that is movable. Chattel can be either animate ...
  3. Chattel Mortgage

    A term used to describe a loan arrangement in which an item of ...
  4. Possessory Lien

    Property that is in the hands of, or is possessed by, the individual ...
  5. Chattel Mortgage Non-Filing Insurance

    An insurance policy covering losses that result from a policyholder ...
  6. Lien

    The legal right of a creditor to sell the collateral property ...
Related Articles
  1. Personal Finance

    Can You Get A Mortgage On A Mobile Home?

    You can get a loan for a mobile home, but it may not be a mortgage. These are the choices for funding manufactured housing.
  2. Investing

    What are Articles of Association?

    Articles of association are a document that specifies the regulations for a company’s operations.
  3. Personal Finance

    How Does a Lien Work?

    A lien gives a creditor the legal right to seize and sell property, then use the proceeds to pay off a borrower’s debt.
  4. Investing

    How Does Securities Lending Work?

    Securities lending is the act of loaning a stock or other security to an investor or firm.
  5. Managing Wealth

    Introduction To Commercial Paper

    Commercial paper is a short-term instrument that can be a viable alternative for retail fixed-income investors looking for a better rate of return on their money.
  6. Personal Finance

    What Is Collateral?

    Collateral is property or other assets that a borrower offers a lender to secure a loan. If the borrower stops making the promised loan payments, the lender can seize the collateral to recoup ...
  7. Markets

    Investing In Property Tax Liens

    Property tax liens can be a viable investment alternative for experienced investors that are familiar with the real estate market.
  8. Markets

    What's a Debtor?

    A debtor​ is an individual or company that owes money.
  9. Markets

    Commercial Paper

    Commercial paper is a short-term debt security issued by financial companies and large corporations. The corporation promises the buyer a return, or profit, for making the loan. The return is ...
  10. Investing

    A Primer On Collateralized Debt Obligation (CDOs)

    A collateralized debt obligation, or CDO, is a structured financial product backed by a pool of loans. When a retail or commercial bank approves loans such as mortgages, auto loans or credit ...
RELATED FAQS
  1. What is the difference between a possessory and a non-possessory lien?

    Gain a basic understanding of a possessory lien and a non-possessory lien, the key differences between the two structures ... Read Answer >>
  2. What types of liens are seen as good and which are bad for my credit?

    Understand what a lien is and what types of liens are most common for individuals, and learn which types of liens are good ... Read Answer >>
  3. When did people first start using collateral to secure loans?

    Read about the history of lending and collateral, including a time when an entire nation was pledged as collateral for all ... Read Answer >>
  4. Where are secured credit cards accepted?

    Repair a damaged credit history or establish one by opening a secured credit card account with a collateral deposit into ... Read Answer >>
  5. How do I avoid a tax lien on my property?

    Find out the best way to prevent the government from placing a lien on your property, including the consequences of having ... Read Answer >>
  6. How can I invest in tax liens?

    Find out about the steps an investor must take to invest in tax liens, along with the potential benefits of doing so. Read Answer >>
Trading Center