Credit Extender,Inc.(CE),a creditor,wants to perfect its interest in property owned by Dandy Goods,Inc.(DG).Filing a financing statement
A)gives notice to other creditors of CE's security interest.
B)is a technicality that has no practical effect.
C)reduces CE,on DG's bankruptcy,to an unsecured creditor.
D)transfers DG's property into CE's possession.

Question

Quizplus · Accepted Answer

Filing a financing statement gives notice to other creditors of CE's security interest, which is important in case of DG's bankruptcy or any other legal dispute related to the property. This way, CE can establish priority over other creditors in claiming the proceeds from the sale of the property. It does not transfer the property into CE's possession or reduce CE's status as a secured creditor.