Published Articles by David Balovich
This is the third of a series of columns in reply to an email received
from John Kellog asking about the proposed revisions to Article p
of the Uniform Commercial Code.
The third proposed change is in the treatment of continuations, amendments
and termination's. Under the proposed changes any change to the
original financing statement would be known as an
amendment and would become a permanent part of the
original filing until it lapses.
The searcher would then be required to review all filings related to the
original financing statement to determine if the financing
statement is still valid as it was originally filed or has
been altered or terminated.
Section 9.403 states that the filing is good for five years (although Arizona
and Michigan amended the filing period to six years) until it lapses.
Many states will remove the record of the filing upon receipt of a termination
statement filed by the secured party. Under the proposed change
the filing officer would be required to maintain the record until the
five year expiration and then could remove it if a continuation filing was
not received. The termination statement would simply be an amendment to
the original filing.
The fourth proposed change would provide the debtor some rights in their
For instance, the debtor would have the right to place a "statement of
correction" that would be included with the records of the
filing. This statement would be filed if the debtor
believed the filing to be incorrect or wrongfully filed.
This would be similar to consumers rights under the FCRA.
The debtor would also have the right to file a termination of the filing
if the secured party failed to do so after the secured party's
debt was satisfied. It is presumed the debtor would simply
have to provide the filing officer a document reporting
the debt had been satisfied.
In the next and final installment in this series we will discuss what
if any, these changes will mean to the filer when adopted.
I wish you well
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