ND Bar Practice Questions - North Dakota Bar Examination Exam

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Two creditors claim a security interest in the same equipment. Creditor A's interest attached first but was never perfected. Creditor B perfected by filing a financing statement after A's interest attached but before any default. Under UCC Article 9 priority rules, who has priority?

Creditor A, because its interest attached first Neither, because conflicting interests cancel each other Both share pro rata Creditor B, because a perfected security interest generally has priority over an unperfected one

Correct Answer:

Creditor B, because a perfected security interest generally has priority over an unperfected one

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