Who has priority among secured creditors?

In the context of secured transactions, the priority among secured creditors is generally determined by the principle of "perfection." A creditor achieves perfection by filing a UCC-1 financing statement, which puts third parties on notice about the secured interest in the collateral. This filing establishes the creditor's claim and typically gives them priority over other secured creditors who may have claims on the same collateral.

When a creditor files the UCC-1 first, they gain a priority position over later filers and generally over creditors who may try to perfect their interests through other means. Although seizing collateral or perfecting through possession can impact priority, the critical factor in this context remains the initial filing of the UCC-1.

This is significant because, under the UCC, competing interests in the same collateral are resolved in favor of the creditor who perfected their interest first, whether through filing or other methods. Therefore, the first to file a UCC-1 financing statement indeed gains priority, making this the correct answer.

The other options, such as seizing collateral or perfecting by possession, can alter priority but are not as straightforward as the filing of the UCC-1 regarding notification to third parties and establishing notice priority. Furthermore, simply notifying the debtor does