We’re taking it back to the basics, sharing the most important types of UCC Forms. This basic understanding lays the groundwork for achieving perfection in your security interest. The best place to start is asking yourself, “does my intent match my form?”.
UCC-1 “The Original”
This is the original financing statement and the only public notice filed by creditors to declare a right to their interest in debtors who default on their loan. The UCC is recorded when a creditor lends money to the debtor and the debtor pledges collateral. If appropriately filed in the right place and with the right information to be perfected, the lender holds onto their position and will collect if their customer defaults or files bankruptcy.
UCC-3 “The Amendment”
A UCC-3 filing is used to make changes to the UCC-1 filing. The most common UCC-3s filed are terminations and continuations, these are needed when a loan is either paid off or needs to be extended. Another common use of a UCC-3 occurs as a result of the secured party filing an amendment if a debtor changes their name or address. There are many actions possible on a UCC-3 form.
- Amendment: Changes to errors or standard adjustments being made to the UCC-1, which could be for the secured party, debtor, or collateral
- Assignment: Assigning or transferring all or a portion of the secured party’s rights to the collateral listed in a UCC-1.
- Continuation: Continues the agreement for five additional years. It must be submitted within the six-month window prior to when the UCC-1 is set to lapse.
- Termination: Public notice that the secured party no longer has an interest in the collateral. If the debtor requests a termination be filed, the secured typically must do so within 20 days of the request.
Regardless of the reason for filing a UCC-3, the key here is to properly amend the original UCC without jeopardizing the creditors position. The correct original UCC-1 number must be used when filing a UCC-3 even if there is a previous UCC-3 number associated with the filing.
UCC-5 “The Info”
This is an information statement to notify the public that an error occurred, for example, a wrongfully filed document, or if the UCC had been filed by a person not entitled to do so. It is important to note that it does not amend any information on the UCC index. A UCC-3 must still be filed in order to amend.
The best way to know that your filing matched your intent successfully is by running a search to reflect a.k.a. a post-lien search. Then you can rest assured that your filing is of record and indexed properly.
If this brought about any questions for you, feel free to contact us. We are here to help with any filing needs you may have.