Talk:Security interest/Archives/2011

Guarantee
Explain the distinction between a guarantee and a security interest.

Wabbitus 16:19, 22 December 2006 (UTC)

Dear Wabbitus: A "guarantee" (as a noun) can be defined as "a promise to answer for the debt, default or miscarriage of another" (i.e., for the debt of another person); see Barron's Law Dictionary, p. 207 (2d ed. 1984). Another definition is "a warranty or promise to undertake an original obligation." Id. Under these two definitions, a guarantee and a security interest are quite different. With a guarantee as the term is used in these two definitions, there is no transfer of any interest in property. That is, the creditor is not receiving an interest in a specific item of property (real estate, equipment, whatever) to protect the creditor in case the debtor defaults. An example of a guarantee would be where a father guarantees to a creditor that the father will pay his son's debt to the creditor in the event the son does not pay. In this example, the father is not actually pledging any specific property that the creditor can take if the son does not pay.

There is, however, another definition of "guarantee" that might come a bit closer to the idea of "security interest". Here's the definition: "something given as security for the performance of an act [ . . . ]"; see Barron's Law Dictionary, p. 207 (2d ed. 1984). I suppose the "something given" could be an item of specific property.

At any rate, the term "guarantee" in law is generally used to mean a "personal guarantee" -- a promise, to a creditor, to pay the debt owed by another person or entity in the event that the debtor does not pay. Generally, the guarantee itself does not necessarily include giving the creditor any interest in a particular item of property. By contrast, the granting of a security interest is, by definition, granting the creditor an interest in a specific item (or items) of property. That's the important distinction.

By the way, the term guarantee can also mean the warranty or promise that a store, a seller of merchandise, gives you when you buy a product. (Seller promises to make the product good or replace it if it doesn't work right -- that sort of thing.)

I don't know that the term "guarantee" necessarily needs to be addressed in the article on Security interest, but maybe some editor will want to add something on that. Yours, Famspear 16:59, 22 December 2006 (UTC)


 * Legally speaking a guarantee is just a personal obligation on the part of the guarantor to make good a debt or obligation of a third party. A security interest is a proprietary right that attaches to a specific asset so that the asset can be taken or sold if the obligation is not performed.  They are both "security" in the loose sense of the word, in that the person to whom the debt is owed will feel more secure if he has the benefit of a guarantee or the benefit of a security interest, but conceptually they are very different things.  For more on guarantees, see surety. --Legis (talk - contributions) 13:28, 16 January 2007 (UTC)

Merger proposal
I propose the articles Security interest, Security agreement, and Secured transaction all be merged together. Currently, the article for security interest is the only one of any substance while the other two are woefully small. I think all can be best described in a single article; after all, a security agreement is just a contract reflecting a secured transaction while a security interest is what makes the transaction secured. Personally, I think Secured transaction would be the most overarching title for the merged article but that can be open for discussion. Pygora123 02:48, 14 February 2007 (UTC)


 * I think they probably could be merged, but one needs to be a little careful about over consolidating - a security interest can arise by operation of law without a security agreement, and equally a transaction can be secured without ever granting a 'security interest' in the class sense of the word by way of set-off or title transfer arrangements (common in the UK, although I understand less so in the US; can't speak for other jurisdictions). --Legis (talk - contributions) 08:15, 14 February 2007 (UTC)


 * I disagree. Security Interest's are being used in both recourse based and non-recourse based transactions and so should stand on their own IMHO - TGlassey - May 21st 2007 09:41


 * I also disagree. Keep the concepts separate.  —Preceding unsigned comment added by 167.155.58.87 (talk) 17:14, 3 January 2008 (UTC)


 * I disagree as well. Besides lawful references, security interests also have legal references such as tickets given civilians by an officer upholding the peace, and to other things such as tax bills issued by governments cities and towns.  Of interest is the ability to honorably refuse these transactions of security interests when citizens are not given original signed copies of the ticket/order/bill.  There are other issues too where these types of transactions can be both lawfully and legally refused that might be of interest to civilians.  But I am not up to date on this info.  I think it's a good idea that these articles remain separate until more research can be done on the legal implications of security interest transactions involved in tickets and taxes issued by peace officers and governments.  Lakeshorebaby 23:15, 9 July 2007 (UTC)
 * Comment I am removing the merge templates from these articles due to a lack of consensus --Lox (t,c) 18:35, 11 January 2008 (UTC)

wrong Redirection
Fixed charge redirection is wrong, fixed charge does not mean security interest and it also does not cover it. It is a way of securing interests. It means "security interest in specific assets". Excerpt from Cambridge International Legal English course book. Tolgat 212.154.18.34 (talk) 08:49, 18 February 2009 (UTC)

PMSIs
This article MUST MUST MUST be amended to include coverage of purchase-money security interests. 71.57.22.20 (talk) 03:23, 29 July 2009 (UTC)

Importance of registration
Could someone explain please why it's so important that a 'charge' be registered to be effective? And some clearer explanations of things wouldn't be amiss either in general in this article... Malick78 (talk) 22:28, 13 January 2011 (UTC)

Guarantee
Explain the distinction between a guarantee and a security interest.

Wabbitus 16:19, 22 December 2006 (UTC)

Dear Wabbitus: A "guarantee" (as a noun) can be defined as "a promise to answer for the debt, default or miscarriage of another" (i.e., for the debt of another person); see Barron's Law Dictionary, p. 207 (2d ed. 1984). Another definition is "a warranty or promise to undertake an original obligation." Id. Under these two definitions, a guarantee and a security interest are quite different. With a guarantee as the term is used in these two definitions, there is no transfer of any interest in property. That is, the creditor is not receiving an interest in a specific item of property (real estate, equipment, whatever) to protect the creditor in case the debtor defaults. An example of a guarantee would be where a father guarantees to a creditor that the father will pay his son's debt to the creditor in the event the son does not pay. In this example, the father is not actually pledging any specific property that the creditor can take if the son does not pay.

There is, however, another definition of "guarantee" that might come a bit closer to the idea of "security interest". Here's the definition: "something given as security for the performance of an act [ . . . ]"; see Barron's Law Dictionary, p. 207 (2d ed. 1984). I suppose the "something given" could be an item of specific property.

At any rate, the term "guarantee" in law is generally used to mean a "personal guarantee" -- a promise, to a creditor, to pay the debt owed by another person or entity in the event that the debtor does not pay. Generally, the guarantee itself does not necessarily include giving the creditor any interest in a particular item of property. By contrast, the granting of a security interest is, by definition, granting the creditor an interest in a specific item (or items) of property. That's the important distinction.

By the way, the term guarantee can also mean the warranty or promise that a store, a seller of merchandise, gives you when you buy a product. (Seller promises to make the product good or replace it if it doesn't work right -- that sort of thing.)

I don't know that the term "guarantee" necessarily needs to be addressed in the article on Security interest, but maybe some editor will want to add something on that. Yours, Famspear 16:59, 22 December 2006 (UTC)


 * Legally speaking a guarantee is just a personal obligation on the part of the guarantor to make good a debt or obligation of a third party. A security interest is a proprietary right that attaches to a specific asset so that the asset can be taken or sold if the obligation is not performed.  They are both "security" in the loose sense of the word, in that the person to whom the debt is owed will feel more secure if he has the benefit of a guarantee or the benefit of a security interest, but conceptually they are very different things.  For more on guarantees, see surety. --Legis (talk - contributions) 13:28, 16 January 2007 (UTC)

Merger proposal
I propose the articles Security interest, Security agreement, and Secured transaction all be merged together. Currently, the article for security interest is the only one of any substance while the other two are woefully small. I think all can be best described in a single article; after all, a security agreement is just a contract reflecting a secured transaction while a security interest is what makes the transaction secured. Personally, I think Secured transaction would be the most overarching title for the merged article but that can be open for discussion. Pygora123 02:48, 14 February 2007 (UTC)


 * I think they probably could be merged, but one needs to be a little careful about over consolidating - a security interest can arise by operation of law without a security agreement, and equally a transaction can be secured without ever granting a 'security interest' in the class sense of the word by way of set-off or title transfer arrangements (common in the UK, although I understand less so in the US; can't speak for other jurisdictions). --Legis (talk - contributions) 08:15, 14 February 2007 (UTC)


 * I disagree. Security Interest's are being used in both recourse based and non-recourse based transactions and so should stand on their own IMHO - TGlassey - May 21st 2007 09:41


 * I also disagree. Keep the concepts separate.  —Preceding unsigned comment added by 167.155.58.87 (talk) 17:14, 3 January 2008 (UTC)


 * I disagree as well. Besides lawful references, security interests also have legal references such as tickets given civilians by an officer upholding the peace, and to other things such as tax bills issued by governments cities and towns.  Of interest is the ability to honorably refuse these transactions of security interests when citizens are not given original signed copies of the ticket/order/bill.  There are other issues too where these types of transactions can be both lawfully and legally refused that might be of interest to civilians.  But I am not up to date on this info.  I think it's a good idea that these articles remain separate until more research can be done on the legal implications of security interest transactions involved in tickets and taxes issued by peace officers and governments.  Lakeshorebaby 23:15, 9 July 2007 (UTC)
 * Comment I am removing the merge templates from these articles due to a lack of consensus --Lox (t,c) 18:35, 11 January 2008 (UTC)

wrong Redirection
Fixed charge redirection is wrong, fixed charge does not mean security interest and it also does not cover it. It is a way of securing interests. It means "security interest in specific assets". Excerpt from Cambridge International Legal English course book. Tolgat 212.154.18.34 (talk) 08:49, 18 February 2009 (UTC)

PMSIs
This article MUST MUST MUST be amended to include coverage of purchase-money security interests. 71.57.22.20 (talk) 03:23, 29 July 2009 (UTC)

Importance of registration
Could someone explain please why it's so important that a 'charge' be registered to be effective? And some clearer explanations of things wouldn't be amiss either in general in this article... Malick78 (talk) 22:28, 13 January 2011 (UTC)

Irrevocable Transfers of Debt and Rights of Re-transfer of an Asset on the Extinguishing of a Debt
This article gives the impression that the form of arrangement in which an asset is irrevocably transferred with a right of re-transfer is rare. In fact, it is extremely common, being the fundamental structure of the Factoring and Invoice Financing businesses. (In Common Law jurisdictions, Factoring and Invoice Disccounting would be impossible without this form of arrangement, as the nature of the security would be considered an unregistered charge on insolvency - an unsecured charge.

While these arrangements are somewhat more complicated by the involvement of third parties, the key features exist, and should be covered by this article. — Preceding unsigned comment added by 86.47.98.223 (talk) 20:06, 27 December 2011 (UTC)