Risk Management Blog

The Uniform Commercial Code (UCC), first published in 1952, is a collection of provisions that govern commercial transactions in the United States. The UCC itself is not law but instead a compilation of suggested best practices. Article 9 of the UCC regards Secured Transactions, that is “business dealings that grant a creditor a right in property owned or held by a debtor to assure the payment of a debt or the performance of some obligation” (law.jrank.org). Some basics of the UCC can be found here.

Once a secured party has filed an initial UCC1 on a debtor, there are various options to amend or change the original UCC1. The tool to do this is called a UCC3, also known as a change statement. There are different UCC3 options available to change an original UCC1. One can assign, terminate, amend party names and/or collateral, and continue. Continuations allow a secured party to extend the term of the UCC while still maintaining a perfected security interest.

If a secured party wants to continue a UCC1, there is a specific time to do so. Check out this reference guide for more information on when to file your UCC3’s.

But what if you wanted to file a UCC3 Continuation but missed the opportunity to do so, therefore allowing your UCC1 to accidentally lapse? Here are some options to help you minimize your risk if a UCC does accidentally lapse.

Have any other tips or insights regarding Continuations or accidentally lapsed UCCs? Please share them with us. Do you have questions? Contact us if you are interested to learn more about FCS’ Online UCC Portfolio Manager, designed to take the headaches out of your UCC and lien searching and filing processes that include tracking features to help you file your Continuations in a timely manner to avoid accidentally lapsed UCC filings.