Final answer:
A security interest must be in writing unless the creditor has possession of the collateral.
Step-by-step explanation:
A security interest must be in writing unless the creditor has possession of the collateral. This statement is True.
Under the UCC (Uniform Commercial Code) Article 9, a security interest in personal property generally requires a written agreement to be enforceable against third parties. However, there is an exception to this rule when the creditor has physical possession of the collateral. In such cases, a written agreement is not required.
For example, if a person gives their car as collateral for a loan and the creditor retains possession of the car, the security interest will be valid even without a written agreement.