Also known as: UCC financing statements · UCC-1 · financing statement
Written by attorneys · grounded in primary & secondary sources — see below
A document that a secured party files in a designated public office to perfect a security interest in personal property. Filing establishes the secured party's priority against third parties claiming an interest in the same collateral.
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Utopia Pharmaceuticals borrowed funds from Upstream Petroleum to purchase specialized mixing equipment. Upstream Petroleum took a security interest in the equipment but never filed a financing statement. When Utopia later granted a security interest in the same equipment to Upland Industries, Upland's later filing gave it priority over Upstream because no financing statement had been filed to perfect the first interest.
Umeko Uchida purchased a delivery van from Ultimate Solutions under a secured installment contract. Ultimate Solutions relied on the state motor vehicle title statute rather than filing a financing statement. When Umeko granted a later security interest to another lender, the title notation alone perfected Ultimate's interest and rendered any financing statement filing unnecessary and ineffective.
A financing statement must be filed to perfect a security interest unless an exception applies under the statute. The filing creates public notice that establishes priority against later creditors and lienholders claiming the same collateral.
Supporting sources
Filing a financing statement is neither necessary nor effective to perfect a security interest in property subject to a certificate-of-title statute that requires notation on the title. Perfection occurs instead through compliance with the title statute.
Supporting sources