A secured creditor’s position rests on two distinct steps that are frequently conflated.
Attachment makes the security interest enforceable against the debtor. It generally requires value given, the debtor having rights in the collateral, and either a security agreement signed by the debtor describing the collateral or possession or control by the secured party.
Perfection makes it effective against third parties — other creditors, a buyer, a bankruptcy trustee. Usually by filing a financing statement in the correct office, but by possession for some collateral and by control for deposit accounts and investment property.
An unperfected interest is not worthless; it binds the debtor. It is simply subordinate to nearly everyone else, and in a bankruptcy that generally means unsecured.
Where it goes wrong: a collateral description too narrow to cover what the lender thought it had; the debtor’s name stated other than exactly as it appears on its public organic record, which can render a filing seriously misleading and therefore ineffective; filing in the wrong jurisdiction; and lapse — financing statements expire and must be continued within a defined window before that.
Priority among perfected interests is generally first to file or perfect, with significant exceptions for purchase-money interests and for control over deposit accounts. The exceptions are where the real disputes are.