NC General Statutes

N.C. Gen. Stat. § 25-9-203 (2026)

Attachment and enforceability of security interest; proceeds; supporting obligations; formal requisites

✓ current as of July 2026

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(a) Attachment. - A security interest attaches to collateral when it becomes enforceable against the debtor with respect to the collateral, unless an agreement expressly postpones the time of attachment.

(b) Enforceability. - Except as otherwise provided in subsections (c) through (i) of this section, a security interest is enforceable against the debtor and third parties with respect to the collateral only if all of the following apply:

(1) Value has been given.

(2) The debtor has rights in the collateral or the power to transfer rights in the collateral to a secured party.

(3) One of the following conditions is met:

a. The debtor has signed a security agreement that provides a description of the collateral and, if the security interest covers timber to be cut, a description of the land concerned.

b. The collateral is not a certificated security and is in the possession of the secured party under G.S. 25-9-313 pursuant to the debtor's security agreement.

c. The collateral is a certificated security in registered form and the security certificate has been delivered to the secured party under G.S. 25-8-301 pursuant to the debtor's security agreement.

d. The collateral is controllable accounts, controllable electronic records, controllable payment intangibles, deposit accounts, electronic documents, electronic money, investment property, or letter-of-credit rights, and the secured party has control under G.S. 25-7-106, 25-9-104, 25-9-105.1, 25-9-106, 25-9-107, or 25-9-107.1 pursuant to the debtor's security agreement.

e. The collateral is chattel paper, and the secured party has possession and control under G.S. 25-9-314.1 pursuant to the debtor's security agreement.

(c) Other UCC Provisions. - Subsection (b) of this section is subject to G.S. 25-4-208 on the security interest of a collecting bank, G.S. 25-5-118 on the security interest of a letter-of-credit issuer or nominated person, G.S. 25-9-110 on a security interest arising under Article 2 or 2A of this Chapter, and G.S. 25-9-206 on security interests in investment property.

(d) When Person Becomes Bound by Another Person's Security Agreement. - A person becomes bound as debtor by a security agreement entered into by another person if, by operation of law other than this Article or by contract, either of the following applies:

(1) The security agreement becomes effective to create a security interest in the person's property.

(2) The person becomes generally obligated for the obligations of the other person, including the obligation secured under the security agreement, and acquires or succeeds to all or substantially all of the assets of the other person.

(e) Effect of New Debtor Becoming Bound. - If a new debtor becomes bound as debtor by a security agreement entered into by another person, both of the following apply:

(1) The agreement satisfies subdivision (b)(3) of this section with respect to existing or after-acquired property of the new debtor to the extent the property is described in the agreement.

(2) Another agreement is not necessary to make a security interest in the property enforceable.

(f) Proceeds and Supporting Obligations. - The attachment of a security interest in collateral gives the secured party the rights to proceeds provided by G.S. 25-9-315 and is also an attachment of a security interest in a supporting obligation for the collateral.

(g) Lien Securing Right to Payment. - The attachment of a security interest in a right to payment or performance secured by a security interest or other lien on personal or real property is also an attachment of a security interest in the security interest, mortgage, or other lien.

(h) Security Entitlement Carried in Securities Account. - The attachment of a security interest in a securities account is also an attachment of a security interest in the security entitlements carried in the securities account.

(i) Commodity Contracts Carried in Commodity Account. - The attachment of a security interest in a commodity account is also an attachment of a security interest in the commodity contracts carried in the commodity account. (1997-181, s. 5; 2000-169, s. 1; 2006-112, s. 45; 2025-25, s. 64.)

Notes of Decisions

Cited in 26 cases (1 in the last 5 years), 1971–2025 · leading case: Kindred of North Carolina, Inc. v. Bond, 584 S.E.2d 846 (N.C. Ct. App. 2003).

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Kindred of North Carolina, Inc. v. Bond, 584 S.E.2d 846 (N.C. Ct. App. 2003). · cites it 5× “If a debtor and a creditor enter into a security agreement granting to the creditor a security interest in certain collateral, and if value is given and the debtor has rights in the collateral, then the creditor becomes a secured party with a security interest which is…”

Lifestore Bank v. Mingo Tribal Pres. Trust, 763 S.E.2d 6 (N.C. Ct. App. 2014). · cites it 8× “Pursuant to North Carolina General Statutes, Article 9 — Secured Transactions, “[a] security interest attaches to collateral when it becomes enforceable against the debtor with respect to the collateral^]” N.C. Gen. Stat. § 25-9-203 (a) (2013). [A] security interest is…”

Mitchell v. Rock Hill Nat'l Bank (In Re Mid-Atl. Piping Prods. of Charlotte, Inc.), 24 B.R. 314 (Bankr. W.D.N.C. 1982). · cites it 4× “769 (1971), the North Carolina Supreme Court considered whether a financing statement could serve as a written security agreement to satisfy N.C.G.S. § 25-9-203(l)(b). In Evans , unlike in this case, there was no separate document called a security agreement, but the Court found…”

Crowell Little v. Cnty. of Orange, 229 S.E.2d 823 (N.C. Ct. App. 1976). · cites it 6× “G.S. 25-9-203, Official Comment 5. So long as there is written language which makes and evinces the bargain, it does not matter that the writing is not denominated a security agreement.”

Dogwood Dev. & Mgmt. Co. v. White Oak Transp. Co., Inc., 665 S.E.2d 493 (N.C. Ct. App. 2008). · cites it 2× “25-8-113) nor to security agreements (G.S.25-9-203). Defendant's reliance on N.”

Evans v. Everett, 183 S.E.2d 109 (N.C. 1971). · cites it 3× “As pointed out in the Official Comment upon G.S. 25-9-203, formal requisites for a security agreement “are reduced to a minimum.”

Bank of Am., N.A. v. Outboard Marine Corp. (In Re Outboard Marine Corp.), 300 B.R. 308 (Bankr. N.D. Ill. 2003). · cites it 2× “See N.C. Gen. Stat. §§ 25-9-203 (l)(a) and 25-9-302(1) (1999).”

Zorba's Inn, Inc. v. Nationwide Mut. Fire Ins., 377 S.E.2d 797 (N.C. Ct. App. 1989). · cites it 5× “See N.C. Gen. Stat. §§ 25-9-203 (l)(a)-(c) (1988).”

Wood v. Provident Fin. Co. (In Re Wood), 13 B.R. 245 (Bankr. E.D.N.C. 1981). · cites it 3× “N.C.G.S. § 25-9-203. CONCLUSIONS OF FACT AND LAW This Court concludes that pursuant to N.”

In Re Murray Bros., Inc., 53 B.R. 281 (Bankr. E.D.N.C. 1985). · cites it 4× “§ 25-9-203, by its terms, clearly requires that a security agreement be written absent possession of the collateral by the secured party.”

In re Jeff Benfield Nursery, Inc., 565 B.R. 603 (Bankr. W.D.N.C. 2017). · cites it 2× “Under the UCC, a security interest will attach wherever (1) value is given to a debtor; (2) the debtor has rights in the collateral; and (3) the “debtor has authenticated a security agreement that provides a description of the collateral .”

McFarland v. Farmers Prod. Credit Ass'n (In Re McFarland), 38 B.R. 370 (Bankr. D. Iowa 1983). · cites it 2× “9203 (1) (1983) *374 with N.C.G.S. § 25-9-203. Further, similar to the Wood creditor, PCA in the instant case did not come into possession of the Debtors’ property “pursuant to agreement” between the parties.”

Show all 26 citing cases →

— N.C. Gen. Stat. § 25-9-203(1) — 7 cases

Crowell Little v. Cnty. of Orange, 229 S.E.2d 823 (N.C. Ct. App. 1976). “G.S. 25-9-203, Official Comment 5. So long as there is written language which makes and evinces the bargain, it does not matter that the writing is not denominated a security agreement.”

Evans v. Everett, 183 S.E.2d 109 (N.C. 1971). “As pointed out in the Official Comment upon G.S. 25-9-203, formal requisites for a security agreement “are reduced to a minimum.”

Bank of Am., N.A. v. Outboard Marine Corp. (In Re Outboard Marine Corp.), 300 B.R. 308 (Bankr. N.D. Ill. 2003). “See N.C. Gen. Stat. §§ 25-9-203 (l)(a) and 25-9-302(1) (1999).”

E-B Grain Co. v. Denton, 325 S.E.2d 522 (N.C. Ct. App. 1985).

Advanced Analytics Labs., Inc. v. Env't Aspecs, Inc. (In Re Env't Aspecs, Inc.), 235 B.R. 378 (E.D.N.C. 1999).

— N.C. Gen. Stat. § 25-9-203(2) — 2 cases

Kindred of North Carolina, Inc. v. Bond, 584 S.E.2d 846 (N.C. Ct. App. 2003). “If a debtor and a creditor enter into a security agreement granting to the creditor a security interest in certain collateral, and if value is given and the debtor has rights in the collateral, then the creditor becomes a secured party with a security interest which is…”

Zorba's Inn, Inc. v. Nationwide Mut. Fire Ins., 377 S.E.2d 797 (N.C. Ct. App. 1989). “See N.C. Gen. Stat. §§ 25-9-203 (l)(a)-(c) (1988).”

— N.C. Gen. Stat. § 25-9-203(3) — 1 case

Ormond Wholesale Co. v. Moore (In Re Moore), 54 B.R. 781 (Bankr. E.D.N.C. 1985).

— N.C. Gen. Stat. § 25-9-203(b) — 1 case

Lifestore Bank v. Mingo Tribal Pres. Trust, 763 S.E.2d 6 (N.C. Ct. App. 2014). “Pursuant to North Carolina General Statutes, Article 9 — Secured Transactions, “[a] security interest attaches to collateral when it becomes enforceable against the debtor with respect to the collateral^]” N.C. Gen. Stat. § 25-9-203 (a) (2013). [A] security interest is…”

— N.C. Gen. Stat. § 25-9-203(b)(l) — 1 case

— N.C. Gen. Stat. § 25-9-203(l)(b) — 1 case

Mitchell v. Rock Hill Nat'l Bank (In Re Mid-Atl. Piping Prods. of Charlotte, Inc.), 24 B.R. 314 (Bankr. W.D.N.C. 1982). “769 (1971), the North Carolina Supreme Court considered whether a financing statement could serve as a written security agreement to satisfy N.C.G.S. § 25-9-203(l)(b). In Evans , unlike in this case, there was no separate document called a security agreement, but the Court found…”

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