What does "attachment" signify in secured transactions?

In the context of secured transactions, "attachment" signifies the moment when a security interest becomes enforceable against a debtor. This occurs when three critical elements are satisfied: the debtor has either signed a security agreement that describes the collateral, value has been given by the secured party, and the debtor has rights in the collateral. Once these conditions are met, the secured party's interest is legally recognized and can be enforced against the debtor and third parties.

Attachment is a crucial step because it establishes the secured party's legal claim to the collateral in case the debtor defaults. It does not involve the physical repossession of the collateral or the procedural aspects of filing a security interest, but rather focuses on the creation of the legal relationship between the debtor and the secured party concerning the collateral. This means the secured party's rights in the collateral become effective once attachment occurs, allowing them to act if the debtor fails to meet their obligations.

Understanding attachment is essential for anyone studying secured transactions, as it frames the legal foundation of how security interests operate within the broader context of creditor-debtor relationships.