Chattel Paper

Record of a debt obligation with a security interest in a tangible item. Ex: Sale-on-credit of a machine (such as a dishwasher), where the transaction includes the promise to pay along with the right of the seller/creditor to seize and to sell the item being financed in the case of default or motor vehicle financing; there is a physical item connected to the paper surrounding this kind of transaction. (instrument with a tangible item connected) • Tangible chattel paper – evidenced by information in tangible form • Electronic chattel paper – evidenced by electronic medium