Yes. Just because the security interest isn’t registered does not mean the security agreement isn’t valid. Only if the security agreement had some defects such as the debtor did not sign it or it did not describe any collateral, then the secured creditor would not be able to enforce it.
If the collateral does not sell for enough to cover the remaining secured obligation owed to the secured creditor, the secured creditor has the right to obtain the remaining amount from the debtor directly or through other assets. The secured party may initiate a legal action against the debtor and get a judgment for the
Disposal of the collateral is a legal term that basically means selling the collateral in an auction and applying the proceeds received from the sale to repay the loan. The proceeds received upon the sale of the collateral are given first to the secured creditor to satisfy their remaining obligation under the security agreement and
What happens when the secured creditor disposes the debtor’s collateral? Read More »
Enforcing a security interest means that the secured creditor has legal remedies that include taking possession of the pledged collateral or disposing of the collateral through a sale and keeping some or all of the proceeds. The Act allows the secured creditor to proceed extra-judicially without having to obtain a court order before repossessing the
What enforcement procedures are allowed? Read More »
In the event of default (the debtor does not repay a loan), the secured creditor has the right to enforce their security interest in the collateral. In this case, a Notice of Enforcement (Form VIII) must be electronically filed to the collateral registry at a fee of K50.
What happens if the debtor doesn’t pay back a loan? Read More »
The law requires the secured creditor to cancel or discharge the registration after the loan has been repaid and all obligations have been satisfied under the security agreement. However, sometimes secured parties do not automatically do so. In the event that the secured creditor doesn’t cancel the registration, the debtor may send a formal request
The period of registration is determined by the information contained in the financing statement which reflects the security agreement between the debtor and the secured creditor. It can be for a period of time or for a perpetual period. However if the collateral is described as consumer goods in the financing statement, this period of
How long does a registration remain effective in the Movable Property Registry System? Read More »
If the error is detrimental to the debtor, for example if a security interest is created over inventory only but the secured creditor described the collateral as “all inventory and equipment”, the debtor has the right to request the secured creditor to correct that error. If the error is in some details not relevant to
What if there is an error in a registration? Read More »
The word priority refers to the right of a secured creditor to derive the economic benefit of a security interest in preference to the right of a competing claimant. Issues of priority arise in situations in which the debtor has granted security interests to multiple secured creditors in the same collateral or the debtor has
A secured creditor must discharge the registered financing statement within fourteen days after all obligations under the security agreement creating the security interest have been performed. A Notice of discharge must be electronically filled through Form IV and a fee of K100 must be paid. In the event that the secured creditor does not file
After the loan is repaid, how can a financing statement be discharged? Read More »
