Practice question
Two creditors have security interests in the same collateral. A lower-ranking creditor has begun enforcement but has not sold, disposed of or retained it, and no agreement for such action has concluded. A higher-ranking creditor invokes Section 46. Which is correct?
- The higher-ranking secured creditor may take over enforcement within the statutory time limits
- Starting first always defeats priority
- Every competing secured interest vanishes
- Only the lower-ranking creditor may act forever
- Priority can never affect enforcement
Legal references
- RA 11057, Section 46: https://lawphil.net/statutes/repacts/ra2018/ra_11057_2018.html
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