All You Need To Know About Substitution Of Collateral: A Guide To Enhanced Security In Secured Transactions
Substitution of collateral, a crucial aspect of secured transactions, entails replacing original collateral with new collateral while maintaining the creditor’s security interest. It involves obtaining creditor consent, ensuring equal or greater value, and preserving creditor rights. Debtors may use this to cure defaults, while creditors benefit from enhanced security. Legal requirements guide the substitution process,…