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What is a UCC-1 filing?

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Quick Answer

A Uniform Commercial Code-1 is a standardized form that a lending party files with the government to ensure that it can collect the interest owed by a borrower in the event that the borrower defaults. If this occurs, then the lender collects the interest in collateral from the borrower. Filing a UCC-1 announces the lender's claim to the collateral, strengthening the lender's position in the event that another lender attempts to collect on the same collateral.

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Full Answer

While there are other fields on the form, the UCC-1 form requires only three pieces of information to be considered legitimate: the debtor's name and address, the creditor's name and address, and a description of the physical property that is being used as collateral.

Most of the time, the financing statement must be filed with the Secretary of State's office in the debtor's state. However, if the specified collateral is tied to a particular piece of real property, the filing must be made in the county where the property is located.

Typically, state Secretary of State offices have a sub-agency tasked with overseeing business organizations and activities, including receipt of financing statements such as the UCC-1. When the collateral is fixed to the debtor's property, the filing must be made in the county's recording office or the county court, since that is where third parties are likely to search for such a record.

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