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Changes to Article 9 and How a Corporate
Status Report Can Help You.
With the changes that are set to take place in regards to UCC
Article 9, you may want to check out Superior's Corporate Status
Report to assist you in verifying the debtor name before initiating
a UCC Search. Currently Article 9 governs any secured transaction
where a debt is partnered with the creditor's secured interest
in the debtor's property (collateral). If the debtor defaults
on the debt, the creditor is then entitled to take possession
of the collateral. The final draft was
distributed to state legislatures for action with a targeted effective
date of July 1, 2001. The legislation has passed both
branches of the Legislature and is expected to be signed by the
Acting Governor in time for the July 1, 2001 deadline. Most states
have approved their own versions of the revisions
With these proposed changes comes more
responsibility - on your part. Under the Revised Article 9, filing
officers will no longer be responsible for determining the legal
sufficiency of a UCC filing. This becomes the sole
responsibility of the secured party. Grounds for rejection of
a financing statement by a filing officer will be limited to conformity
with the basic requirements of completing the form, correct payment
of fees and filing method. The State will accept the filing as
presented without review; if the exact name of the debtor is not
correct, the security interest is not perfected.
With responsibility for debtor name
accuracy shifting from the State to the creditor, it is in the
creditor's best interest to verify the debtor name before filing
the UCC financing statement. You can do this by using
Superior's Corporate Status Search to provide verification of
the debtor's name to ensure an accurate filing. For information,
call Helen Mulligan at 800.848.0489, extension 5719.
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