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What is a UCC-1 financing statement?

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Quick Answer

A UCC-1 financing statement is a form that should be filed when a party takes a security interest in certain collateral to perfect that interest, explains Nolo. When the interested is perfected, no other party, including a creditor or trustee in bankruptcy, can claim rights to the collateral.

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Full Answer

Most security interests are perfected when a UCC-1 financing statement is filed with the secretary of state, according to Nolo. The statement is available for public access because the purpose of the statement is to put other parties on notice of the secured party's interest in the collateral. The party perfecting the interest must comply with the requirements of the UCC or the statement may be invalid.

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