What is generally true about the priority of a perfected security interest?

Study for the Georgia Bar Exam. Prepare with flashcards and multiple choice questions, each question has hints and explanations. Get ready for your exam!

A perfected security interest typically has certain priority rights in comparison to other types of interests. In general, when a security interest is perfected—meaning it has been properly filed or recorded according to legal requirements—it gains significant priority over unsecured interests. This priority allows the holder of the perfected security interest to be paid before any unsecured creditors if the debtor defaults.

However, an important nuance to consider is that a perfected security interest can indeed lose its priority to certain statutory liens. Statutory liens arise by operation of law, typically as a result of the services rendered or goods provided by third parties (like mechanics' liens or tax liens). These statutory liens may take precedence over previously perfected security interests despite the perfection status because they are legislatively defined to have priority in certain situations, typically to promote fairness and ensure that those providing crucial services are paid.

This understanding clarifies why the option mentioning that a perfected security interest may lose priority to statutory liens is correct—it highlights the balance among competing interests, particularly in situations where public policy aims to protect certain creditors or claims that arise without the need for filing.

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