Choate is a legal term that refers to a completed or perfected lien or security interest on a property. It signifies that the lien or security interest has become fixed and cannot be altered or defeated by any subsequent actions or claims. Once a lien or security interest is deemed choate, it has priority over any other claims or interests that may arise in the future. This term is commonly used in the context of bankruptcy proceedings and creditor rights.
Choate is a legal term that refers to a legal principle or doctrine related to the perfection of security interests in personal property. The term originates from the case of Choate v. Trapp (1878), which established the concept of “choateness” in relation to the priority of security interests.
In the context of secured transactions under U.S. law, a security interest is considered “choate” when it is fully perfected and has priority over competing claims or interests in the collateral. A security interest becomes choate when all requirements for perfection are satisfied, such as filing a financing statement, taking possession of the collateral, or obtaining control over certain types of property.
The principle of choateness is significant in determining the priority of creditors’ claims in bankruptcy proceedings or disputes involving competing security interests. A choate security interest generally has priority over unperfected or subsequently perfected security interests, providing the secured party with stronger legal rights and remedies in case of default or insolvency.
In summary, “choate” describes the state of a fully perfected security interest in personal property, indicating that it is valid, enforceable, and has priority over other claims or interests in the collateral. This legal principle plays a critical role in secured transactions and creditor rights under U.S. commercial law.
Choate is a legal term that refers to a lien or security interest that has become fixed and cannot be changed or altered by any subsequent actions or events.
Unlike other liens, a Choate lien is considered to be perfected and has priority over any other liens or claims that may arise after it has been established.
Having a Choate lien provides the creditor with a higher level of security and assurance that their claim will be satisfied before any other competing claims or liens.
A Choate lien can be established by meeting certain legal requirements, such as properly filing a financing statement or obtaining a judgement against the debtor.
No, once a lien becomes Choate, it cannot be changed or modified by any subsequent actions or events. It remains fixed and retains its priority over other liens.
If a lien is not properly perfected, it may lose its status as a Choate lien and may be subordinated to other liens or claims that arise later.
A Choate lien remains valid until the underlying debt or obligation is satisfied or released, or until the lien is otherwise extinguished by operation of law.
Yes, a Choate lien can be transferred or assigned to another party, subject to any applicable legal requirements or restrictions.
Violating a Choate lien may result in legal consequences, such as liability for damages or potential loss of priority in the distribution of assets in case of bankruptcy or insolvency proceedings.
This site contains general legal information but does not constitute professional legal advice for your particular situation. Persuing this glossary does not create an attorney-client or legal adviser relationship. If you have specific questions, please consult a qualified attorney licensed in your jurisdiction.
This glossary post was last updated: 27th April 2024.
To help you cite our definitions in your bibliography, here is the proper citation layout for the three major formatting styles, with all of the relevant information filled in.
- Page URL:https://dlssolicitors.com/define/choate/
- Modern Language Association (MLA):Choate. dlssolicitors.com. DLS Solicitors. May 09 2024 https://dlssolicitors.com/define/choate/.
- Chicago Manual of Style (CMS):Choate. dlssolicitors.com. DLS Solicitors. https://dlssolicitors.com/define/choate/ (accessed: May 09 2024).
- American Psychological Association (APA):Choate. dlssolicitors.com. Retrieved May 09 2024, from dlssolicitors.com website: https://dlssolicitors.com/define/choate/
Our team of professionals are based in Alderley Edge, Cheshire. We offer clear, specialist legal advice in all matters relating to Family Law, Wills, Trusts, Probate, Lasting Power of Attorney and Court of Protection.
All author posts