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Alabama · Through Act 2026-611

Ala. Code § 7-9A-204: After-Acquired Property; Future Advances.

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Where this section sits in the code
  1. Title 7 Commercial Code.
  2. Article 9A Secured Transactions.
  3. Part 2 Effectiveness of Security Agreement, Attachment of Security Interest; Rights of Parties to Security Agreement.
  4. Division 1 Effectiveness and Attachment.

(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 7-9A-315(a) or commingled goods under Section 7-9A-336(c);

(2) to a commercial tort claim as proceeds under Section 7-9A-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.

Collected 2026-09-03T14:01:52Z. Source file · JSON

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