What is the primary difference between attachment and perfection?

The primary difference between attachment and perfection lies in their functions within secured transactions. Attachment occurs when a security interest is created in the collateral, which provides the secured party with the right to claim the collateral if the debtor defaults. This process requires that three conditions are met: value must be given, the debtor must have rights in the collateral, and there must be a security agreement either evidenced by a record or the creditor must take possession of the collateral.

On the other hand, perfection is the process through which the secured party ensures its security interest is enforceable against third parties. This typically involves filing a financing statement, taking possession of the collateral, or obtaining control over the collateral, which serves to provide public notice and establish the priority of the secured party’s claim.

Thus, while attachment is concerned with the establishment of the security interest itself—a private matter between the debtor and creditor—perfection focuses on protecting that interest from competing claims, making it a public matter. This distinction highlights that attachment creates the interest, while perfection serves to safeguard that interest against claims from others, securing the creditor's position in the event of the borrower's bankruptcy or default.