REG Secured Transactions · Updated November 2026
Two Creditors Want the Same Collateral. Who Wins?
Identify each claimant's legal status before applying priority rules.
Perfected secured party
Has an attached security interest and has satisfied the applicable perfection requirements.
Unperfected secured party
May have rights against the debtor but a weaker position against certain competing claimants.
PMSI
A purchase-money security interest can receive special priority when statutory requirements and timing rules are satisfied.
Buyer in ordinary course
A qualifying buyer can receive special protection from certain security interests created by the seller.
Timing
When perfected secured creditors compete, filing or perfection timing can become central.
The takeaway
Do not memorize one universal priority list. Classify the claimants first.
Related Summit guides
FAQ
Does a PMSI always win automatically?
No.
Can a buyer take free of a security interest?
Certain qualifying buyers can.
Is an unperfected creditor usually weaker against third parties?
Yes.