Priority of Security Interests Created by New Debtor

  1. Law
  2. Georgia Code
  3. Commercial Code
  4. Secured Transactions
  5. Perfection and Priority
  6. Priority of Security Interests Created by New Debtor

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  1. Subordination of security interest created by new debtor. Subject to subsection (b) of this Code section, a security interest that is created by a new debtor in collateral in which the new debtor has or acquires rights and is perfected solely by a filed financing statement that would be ineffective to perfect the security interest but for the application of paragraph (1) of subsection (i) of Code Section 11-9-316 or Code Section 11-9-508 is subordinate to a security interest in the same collateral which is perfected other than by such a filed financing statement.
  2. Priority under other provisions; multiple original debtors. The other provisions of this part determine the priority among conflicting security interests in the same collateral perfected by filed financing statements described in subsection (a) of this Code section. However, if the security agreements to which a new debtor became bound as debtor were not entered into by the same original debtor, the conflicting security interests rank according to priority in time of the new debtor's having become bound.

(Code 1981, §11-9-326, enacted by Ga. L. 2001, p. 362, § 1; Ga. L. 2013, p. 690, § 7/SB 185.)

The 2013 amendment, effective July 1, 2013, rewrote subsection (a), which formerly read: " Subordination of security interests created by new debtor. Subject to subsection (b) of this Code section, a security interest created by a new debtor which is perfected by a filed financing statement that is effective solely under Code Section 11-9-508 in collateral in which a new debtor has or acquires rights is subordinate to a security interest in the same collateral which is perfected other than by a filed financing statement that is effective solely under Code Section 11-9-508."; and substituted "described in subsection (a) of this Code section" for "that are effective solely under Code Section 11-9-508" in the first sentence of subsection (b).

RESEARCH REFERENCES

U.L.A.

- Uniform Commercial Code (U.L.A.) § 9-326.


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