Any secured party creditor should be familiar with the filing of a UCC-1. This is a form that is related to Section 9 of the Uniform Commercial Code (UCC) that was established in 1952, and has been updated at various times since its inception. While the Code itself may be a lengthy one, it is really quite simple as it pertains to secured transactions.

The UCC was established as a means to harmonize the state laws that deal with commercial transactions and sales. The UCC deals with transactions that involve personal property only and does not have anything to do with real property transactions. The Code is a long-term joint project of the American Law Institute and National Conference of Commissioners on Uniform State Laws. States are not required to use the Code as law, but only as a recommendation as to the laws that should be adopted. While the majority of states have incorporated the entire Code as part of their law, there could be certain aspects of it that will vary from state to state.

This is a lengthy document, but as a secured party creditor the only part of the Code that needs to be understood is Section 9, which is the section that governs secured transactions. This section was updated in 2001 and adopted by all 50 states. It was established as a means to protect creditors in the event a borrower defaults on a loan. It gives the creditor the right to legally take personal property as collateral for a loan when the loan agreement is breached. This is done by the filing of a UCC-1 statement, which is used to list the personal property securing the loan. Some states require Brand Levitra Tadacip the form to be filed with the Secretary of State’s office, while others require filing at the county courthouse.

Part of the revisions made in 2001 had to do with the development of electronic documentation. This revision requires acknowledgment of the personal property pledged by the debtor by means of a signature or some manner other than a signature. The revision also provided that the filing of the UCC-1 must be filed in the location at which the debtor is located, even if the collateral is located elsewhere.

The Uniform Commercial Code is important for secured party creditors to be aware of, but unless they also deal with other UCC related sales transactions, Section 9 of the code is all they need to be concerned with. Perfecting the lien on personal property pledged on a UCC-1 pursuant to the guidelines established by the Uniform Commercial Code can not only ensure that the loan will be properly secured, but also put the creditor in front of any unsecured creditors in the event the debtor files for bankruptcy.

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Category: Finance
Keywords: uniform commercial code