UCC basics series #2: UCC-3s
UCC Back-to-Basics Series
UCC-3s are used in a variety of transactions, and they are a key part of life cycle of a loan. Learn more about the how UCC-3s help you to secure your assets.
A UCC-3 is defined as a filing used to make any changes to a UCC-1 filing, including continuing or terminating the filing. In short, UCC-3s are amendment filings, and there are five different types:
This type of filing extends the life of the financing statement by another five years.
This type of filing is used to change or add critical information about the debtor or the secured party. For example, they can be used to change the name or the address.
This type of filing is used to add collateral, remove collateral or restate the entire collateral description. Prior to the RA9, collateral amendments were also called “releases.”
This type of filing is used to transfer the rights in a filing from one secured party to another. There are both “partial” and “full” assignments.
This type of filing is used to extinguish the lien before its five-year term has ended. Keep in mind that debtors can file terminations, because RA9 does not require any signatures on the filings. Therefore, you may not be aware that one of your liens has been terminated. Select service providers offer monitoring services, which will let you know when another party files a termination on one of your UCCs.
Common UCC-3 Filing Mistakes
Incorrect file number
Normally, this is because a state has changed the format of its filing numbers.
Incorrect file date
With the help of a service provider’s technology and service professionals, retrieving all of the correct filing data becomes less of a risk.
Continuation not filed within proper window
Either too early or too late. It is always best to make changes as soon as possible, but as a few guidelines: 1) changes to the debtor’s name must be filed within four months of the name change; 2) in most cases, continuations may be submitted no earlier than six months prior to the expiration date (every five years); in all other cases, file as soon as possible.
Multiple transactions on the same form
Prior to RA9, a number of states would allow multiple transactions—for example, a continuation and an amendment on the same form. More than half of all states now require only one transaction per form. This allows a UCC to be filed electronically for faster filings and acknowledgement and lower cost in many states.
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Be sure to read more about how to conduct searches, fixture filings, and more.