Contracts/UCC-1 financing statement: Difference between revisions
en>MrChupon m (Reverted edits by 65.113.118.159 (talk) to last revision by Ukexpat (HG)) |
|||
| Line 11: | Line 11: | ||
==References== | ==References== | ||
{{Reflist}} | {{Reflist}} | ||
Revision as of 19:51, July 9, 2011
A UCC-1 financing statement (an abbreviation for Uniform Commercial Code-1) is a legal form that a creditor files to give notice that it has an interest in the personal property of a delinquent debtor (a person who has not paid back their debt as specified in the agreement creating the debt).[1] This form is filed in order to "perfect" a creditor's security interest by giving public notice that there is a desire to take possession of certain assets for repayment of a specific debt. Such notices are often found in the local newspapers. Once the form has been filed the creditor may move forward in the process of appropriating perfected assets of a debtor that are of equal value to the debt owed.[2] This process is also called "perfecting the security interest" in the property, and this type of loan is a secured loan.[3]
Pursuant to the standards set forth in the UCC, the financing statement need only contain three pieces of information:
- the debtor's name and address
- the creditor's name and address
- a description of the collateral, which may be very general
The financing statement is generally filed with the office of the state secretary of state, in the state where the debtor is located - for an individual, the state where the debtor resides, for a business organization the state of incorporation or organization. Many states have a state agency which operates under the secretary of state, and which is tasked with overseeing business organizations and activities, including receipt of financing statements. However, an exception exists if the collateral is something that is tied to a particular piece of real property, such as timber, mineral rights, or fixtures. In that case, the filing must be made in the county where the property is located, usually in the recording office or county court, because that is where third parties are most likely to search for such records.
The filing creates a lien against the property, so the borrower may not dispose of the property without paying off the debt.
