Filing a UCC-1
Across the country, ordinary business transactions like buying, selling and leasing are all governed by one uniform law: the Uniform Commercial Code or UCC. What this means for you is that if you do business in other states beyond your own, you don’t have to sweat the local commerce laws where you do business. Not because it’s a Federal Law, but because UCC is actually a state law that’s been adopted by all 50 states.
A great thing is, most any credit or products can be secured by using a UCC-1 Financing Statement. A UCC-1 Financing Statement is a legal form that a creditor can file to serve as notice that it has an interest in the personal property of a debtor. To “perfect” a creditor’s security interest, the creditor needs only to file the form thereby giving public notice that there is an ability to take possession of certain assets to repay a debt. You’ve likely seen notices of this nature in your local newspaper.
Upon filing, the creditor is then free to move forward, appropriating any perfected assets that are of equal value to the debt he’s owed.
A UCC-1 Financing Statement requires 3 important pieces of information:
1. Debtor name and address
2. Creditor name and address
3. Description of the collateral
Usually, a UCC-1 Financing Statement form is filed with the Office of the Secretary of State in the state in which the debtor is residing (if he is a sole proprietorship). For a business organization, filing needs to take place in the state of incorporation. There are some exceptions, though. Collateral that’s fixed to real property must be filed in the county where it is located. Timber is a good example of this.
By filing a UCC-1 Financial Statement form, you are creating a lien against the property. This prevents the debtor from disposing of the property instead of paying off his debt to you.
Since statute of limitations applies, it’s important to understand the laws that apply to your industry. It’s worth a talk with a lawyer to fully understand every aspect of filing a UCC-1 Financial Statement form.
I’ve filed my UCC 1 financing statement with my county clerks office. Now, I’m having difficulties locating that file with the same county clerks office. I’d also like to obtain information on where to locate the filing in local newspapers. I’d appreciate you help in assisting me in locating this information. Thank you.
Hi Larry, In terms of locating the file with the country clerks office, We suggest you speak to them directly or contact a lawyer for further assistance. We would be happy to help with what you need on a UCC 1 statement, but as far as the legal process afterwards we believe a lawyer would be more helpful if you run into issues.