Ark. Code Ann. § 4-9-204 (2026)
After-acquired property — Future advances
- Except as otherwise provided in subsection (b), a security agreement may create or provide for a security interest in after-acquired collateral.
-
A security interest does not attach under a term constituting an after-acquired property clause to:
- consumer goods, other than an accession when given as additional security, unless the debtor acquires rights in them within ten (10) days after the secured party gives value; or
- a commercial tort claim.
- A security agreement may provide that collateral secures, or that accounts, chattel paper, payment intangibles, or promissory notes are sold in connection with, future advances or other value, whether or not the advances or value are given pursuant to commitment.
History. Acts 2001, No. 1439, § 1.
Case Notes
After-Acquired Collateral.
Plan proposed by Chapter 12 debtors which treated three security agreements they entered with a creditor separately by eliminating provisions in the agreements that provided cross-collateralization violated 11 U.S.C. § 1225(a)(5), and could not be confirmed. Although 11 U.S.C. § 1222(b)(2) authorized the debtors to modify the rights of holders of secured claims through their bankruptcy plan. that authorization was limited to modifications that complied with § 1225, and § 1225(a)(5)(B)(i)'s lien-retention requirement encompassed cross-collateralized property. In re Heath, 483 B.R. 708 (Bankr. E.D. Ark. 2012).
Attachment of Security Interests.
A security interest such as a chattel mortgage attaches when it has been executed, the secured creditor has given value, and the debtor has acquired some interest in the collateral which he can encumber. Lonoke Production Credit Ass'n v. Bohannon, 238 Ark. 206, 379 S.W.2d 17 (1964) (decision under prior law).
The creditor's security interest in an account receivable attached with the transfer of the account where no question was raised as to the agreement between the debtor and creditor concerning the transfer, as to value given or as to the debtor's rights in the collateral. Standard Lumber Co. v. Chamber Frames, Inc., 317 F. Supp. 837 (E.D. Ark. 1970) (decision under prior law).
Chattel Mortgages.
As between the parties, former §§ 4-9-204 — 4-9-206 control the validity and enforcement of a chattel mortgage. Anderson v. First Jacksonville Bank, 243 Ark. 977, 423 S.W.2d 273 (1968) (decision under prior law).
Future Advances.
The trial court properly held the security agreement executed in 1993 by the debtors did not also secure the later, separate note executed by the wife in 2001, after the husband and wife had separated for the last time. First Nat'l Bank v. Garner, 86 Ark. App. 213, 167 S.W.3d 664 (2004).
Priority of Liens.
Properly perfected materialmen's liens took priority over the attached but unperfected lien of the supplier of an air conditioning unit, cooling tower, kitchen range and oven, and duct work in such goods only to the extent that labor or material was supplied after such goods became fixtures. House v. Long, 244 Ark. 718, 426 S.W.2d 814 (1968) (decision under prior law).
Where a bank loaned money with a financing statement and chattel mortgage covering future advances being filed, and subsequently others loaned debtor money acquiring liens, the bank had first priority when the debtor failed to meet payments and its property had to be sold, notwithstanding the debtor had payed off the first loan to bank, since it never was out of debt to bank. Associated Bus. Inv. Corp. v. First Nat'l Bank, 264 Ark. 611, 573 S.W.2d 328 (1978) (decision under prior law).
Cited: Hill v. State, 253 Ark. 512, 487 S.W.2d 624 (1972); United States v. Riceland Foods, Inc., 504 F. Supp. 1258 (E.D. Ark. 1981); In re Howell Enterprises, Inc., 105 B.R. 494 (Bankr. E.D. Ark. 1989); Beebe v. MacMillan Petro. (Ark.), Inc., 115 B.R. 175 (Bankr. W.D. Ark. 1990); Herringer v. Mercantile Bank, 315 Ark. 218, 866 S.W.2d 390 (1993); In re Russell, 165 B.R. 262 (Bankr. E.D. Ark. 1994) (decisions under prior law).