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Illinois Compiled Statutes

810 ILCS 5/9-204 (2026)

After-acquired property; future advances

✓ current as of May 2026
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(810 ILCS 5/9-204) (from Ch. 26, par. 9-204)
    Sec. 9-204. After-acquired property; future advances.
    (a) After-acquired collateral. Except as otherwise provided in subsection (b), a security agreement may create or provide for a security interest in after-acquired collateral.
    (b) When after-acquired property clause not effective. Subject to subsection (b.1), a security interest does not attach under a term constituting an after-acquired property clause to:
        (1) consumer goods, other than an accession when
    
given as additional security, unless the debtor acquires rights in them within 10 days after the secured party gives value; or
        (2) a commercial tort claim.
    (b.1) Limitation on subsection (b). Subsection (b) does not prevent a security interest from attaching:
        (1) to consumer goods as proceeds under Section
    
9-315(a) or commingled goods under Section 9-336(c);
        (2) to a commercial tort claim as proceeds under
    
Section 9-315(a); or
        (3) under an after-acquired property clause to
    
property that is proceeds of consumer goods or a commercial tort claim.
    (c) Future advances and other value. 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.
(Source: P.A. 103-1036, eff. 1-1-25.)

    
Notes of Decisions
Cited in 4 cases, 1997–2007 · leading case: Universal Guar. Life Ins. Co. v. William N. Coughlin, 481 F.3d 458 (7th Cir. 2007).
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Universal Guar. Life Ins. Co. v. William N. Coughlin, 481 F.3d 458 (7th Cir. 2007). “See 810 ILCS 5/9-204; Metro. Life Ins. Co. v.”
Metro. Life Ins. Co. v. Am. Nat'l Bank & Trust Co. (Ill. App. Ct. 1997). · cites it 2× “As there is an ambiguity between the 1990 security agreement's dragnet clause and the 1992 documents that refer only to accounts receivable, and considering the fact that Bank One and the Partnership terminated the 1990 security agreement by mutual consent when they executed the…”
Coughlin, William N. v. Universal Guar. (7th Cir. 2007). “See 810 ILCS 5/9-204; Metro. Life Ins. Co. v.”
Emrick v. First Nat'l Bank (Ill. App. Ct. 2001). “9-204(3) (now see 810 ILCS 5/9-204(2)(c) (West 2000))). Therefore, the Bank could legally apply the proceeds from the sale of collateral to any loan it selected.”
— 810 ILCS 5/9-204(2)(c) — 1 case
Emrick v. First Nat'l Bank (Ill. App. Ct. 2001). “9-204(3) (now see 810 ILCS 5/9-204(2)(c) (West 2000))). Therefore, the Bank could legally apply the proceeds from the sale of collateral to any loan it selected.”
— 810 ILCS 5/9-204(3) — 1 case
Metro. Life Ins. Co. v. Am. Nat'l Bank & Trust Co. (Ill. App. Ct. 1997). “As there is an ambiguity between the 1990 security agreement's dragnet clause and the 1992 documents that refer only to accounts receivable, and considering the fact that Bank One and the Partnership terminated the 1990 security agreement by mutual consent when they executed the…”
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