What are the types of items that can be secured by a security interest?

In North Dakota, business transaction law outlines the items that can be secured by a security interest. A security interest is a way for creditors to protect their interest in a debtor’s property, and allows them to take possession of the property being secured if the debtor defaults on the loan. The types of items that can be secured by a security interest vary from state to state, but in North Dakota they include goods, accounts, chattel paper, documents, general intangibles, instruments, and inventory. Goods are defined in North Dakota as any tangible item that is movable and in the possession of the debtor. This includes equipment, automobiles, and furniture. Accounts and chattel paper are intangibles such as documents that evidence an obligation to pay a certain amount of money. Accounts can be unpaid invoices from customers or debt owed to suppliers. Chattel paper is paperwork related to the sale of goods or services. General intangibles are any title or limited interest in an unrelated asset. This could include patents, copyrights, trademarks, franchise agreements, and royalty payments. Instruments refer to documents of title such as promissory notes, certificates of stock, bonds, and mortgages. Inventory can also be secured by a security interest. This encompasses any item of personal property that is held for sale, lease, or rental in the ordinary course of business. Finally, North Dakota also allows the debtor’s rights and interests under a lease agreement to be secured by a security interest. This includes both real property and personal property leases.

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What are the types of items that can be secured by a security interest?

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