What does a UCC filing cover?

A UCC-1 filing is a legal form that a creditor files to secure its interest in a borrower’s property or assets used as collateral for a loan. The filing serves as a public notice that the creditor has the right to take possession of the assets as repayment on the underlying debt.

What is a payment intangible under the UCC?

Defined in the UCC as a general intangible under which the account debtor’s principal obligation is a monetary obligation (NY UCC § 9-102(a)(61)). A payment intangible is an asset type over which an entity can grant a security interest under Article 9 of the UCC.

What are the benefits after filing a UCC-1?

A UCC filing ensures you are a secured creditor and therefore in the best possible position to get paid. In addition, a Purchase Money Security Interest filing provides the priority right of repossession of your inventory or equipment at default or bankruptcy. You define default in your security agreement.

What is an example of payment intangible?

The Uniform Commercial Code defines a payment intangible as “a general intangible under which the ac- count debtor’s principal obligation is a monetary obligation.” A general intan- gible “means any personal property, including things in action, other than accounts, chattel paper, commercial tort claims, deposit …

Is a tax refund a payment intangible?

Because no section of Article 9 expressly discusses federal income tax refunds, such refunds are deemed to be “general intangibles.” See Del.

How do you perfect a general intangible?

To perfect a security interest in general intangibles, a lender must file a proper financing statement in the UCC filing office in the state where the debtor is deemed to be located under the UCC (typically, the state where the debtor is organized).

What is a UCC filing used for?

A UCC-Uniform Commercial Code-1 statement is a legal notice filed by creditors as a way to publicly declare their rights to potentially obtain the personal properties of debtors who default on business loans they extend.

What can be used as collateral in a UCC-1 filing?

Typical Collateral. UCC-1 filings typically use moveable assets as collateral, which can include vehicles, office equipment and fixtures, investment securities, inventory, receivables, letters of credit, and other tangible items of value.

Can a UCC-1 statement be included in a secured contract?

According to the ninth article of the UCC, entitled “Secured Transactions,” a lender must incorporate completed UCC-1 statements in a business loan’s contract for it to be deemed effective.

Is there a way to remove a UCC-1 filing?

There are a few ways you could remove your UCC-1 filing: Pay off your loan: This is the surest way to have the UCC-1 filing removed. Depending on the state, the financing statement usually remains in your state’s searchable index for one year after the loan is repaid. In that case, the statement would reflect that the loan is repaid.

How is a UCC-1 statement assigned a file number?

In most cases, UCC-1 statements are filed with the Secretary of State, which subsequently time-stamps the document and assigns a file number to the associated parties. In industry jargon, the process of issuing UCC-1 notices is referred to as “perfecting the security interest” in the debtor’s property.