7Newswire
14 Mar 2023, 22:26 GMT+10
Are you wondering how you'll protect your company and the assets you've worked hard to earn? You might hear about things like UCC filings but have no idea what they are or why you might need one.
Fortunately, understanding what a UCC filing is is quite easy. Once you understand the basics of UCC filings, you'll know if you need one for your business.
Hopefully, our guide will help you understand this type of filing so you can decide whether you need one for your business.
Benefits of UCC Filing
The UCC filing, which stands for Uniform Commercial Code, is a legal document that is filed in public records. This is to give a secured party a lien or security interest in a certain debtor's personal property and assets. The benefits of UCC filings are many for both lenders and borrowers.
By filing a UCC-1, lenders can be assured that their loan is secure and prevent other creditors from taking away what the lender has already acquired. The borrower also benefits from the filing, as the loan can be secured in the form of collateral up to the value of what has been loaned out.
Under a UCC filing, both lenders and borrowers are protected from further liabilities resulting from the loan. Furthermore, lenders enjoy priority, which is recognized as all secured debts are first paid before unsecured creditors. Finally, a UCC filing can give evidence and credibility when a dispute arises.
Types of UCC filings
There are several different types of UCC filings. A UCC-1 is the most common filing, used when the debtor provides their personal property as collateral when taking out a loan.
A UCC-3 is used to amend or terminate an existing UCC filing, and a UCC-11 is a search authorization form giving a legal organization the right to search public records about a UCC filing. UCC 3 termination is an official document that is filed to inform the public that a previously filed UCC financing statement (UCC-1), which was used to secure debt, is no longer in effect.
When a UCC Termination form is filed, it cancels the UCC-1 statement and removes the secured debt from the public record. This can be done when the loan is refinanced, paid off, or when a party voluntarily elects to terminate the security interest.
Cost of Filing
Depending on the state, these costs can vary from a few hundred dollars to over a thousand. Additionally, the filing can be expedited for an added fee.
Furthermore, in some cases, the business owner or consumer filing the lien may have to pay for a search of public records to verify that the UCC lien is valid. All in all, the cost of filing a UCC lien will depend on the individual state, the complexity of the lien, and any added fees.
Start Protecting Your Investments Today
A UCC filing is a critical filing that provides lenders and business owners with legal protection for their investments. UCC filings are an important tool that helps businesses thrive and ensures that lenders stay secure.
Business owners should look into the options available to them and consider speaking to a UCC attorney to decide what their options are. Start protecting your investments today with a UCC filing.
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