Question

Within which time period must a Purchase Money Security Interest ("PMSI") creditor in goods, other than inventory or livestock, perfect her security interest once the debtor takes possession of the collateral?

Answer 1

Answer:

First of all, a PMSI allows a creditor to legally claim possession of property financed by them or demand repayment. The PMSI grants creditors preference over other lenders' claims.

The requirement for the proper perfection of a PMSI in goods other than inventory or livestock is within a 20 day period after the debtor receives possession of the collateral. This rule applies to goods such as equipment and machinery.

In case the good is software, there is no 20 day period. The PMSI must be perfected when the debtor receives possession of the collateral.