What happens during the process of 'attachment' in secured transactions?

During the process of 'attachment' in secured transactions, a security interest becomes enforceable against the debtor. This is a crucial stage because it signifies that the secured party has obtained rights over the collateral, which allows them to enforce their security interest in case of default. For attachment to occur, three essential requirements must be met: the debtor must have rights in the collateral, the secured party must give value, and there must be a security agreement that adequately describes the collateral.

This is a fundamental principle under Article 9 of the Uniform Commercial Code (UCC), which governs secured transactions. Once attachment occurs, the secured party has established their claim to the collateral and can pursue it for recovery if the debtor defaults on their obligations.

In contrast, the other options refer to different stages or actions that occur in the context of secured transactions. Selling collateral to recover debts happens after attachment and often occurs during the enforcement process. Distributing funds among creditors typically relates to liquidation or bankruptcy processes, not the attachment itself. Establishing a new lien suggests a different legal framework or situation, which does not directly pertain to the definition of attachment as outlined in secured transactions.