chattel paper

Chattel paper is a legal document that indicates a financial interest in a specific piece of property, often as part of a loan or lease agreement. It includes both a promise to pay (like a promissory note) and a security interest in the property (like a vehicle or equipment). Essentially, it’s a record that combines a debtor’s obligation to pay and the creditor’s right to take possession of the property if the debtor defaults. Chattel paper is important in financing and secured transactions, as it helps lenders protect their interests in tangible assets.