The Revisions to Article 9 of the Uniform Commercial Code, Secured Transactions, have been adopted by 30 states with action pending in the remaining jurisdictions. How familiar are you with the changes? Take our Quiz and find out!
1. The "location" of the debtor depends on the debtor's principal residence if the debtor is an individual or the principal place of business if the debtor is a corporation.
2. Under the Revision, the collateral category of "instruments" by definition requires the collateral to be a written document.
3. After July 1, 2001, any documents which are filed to continue the effectiveness of a previous financing statement that was properly filed before July 1, 2001 must be filed in the central filing office.
4. Under Revised Article 9, the proper way to perfect a security interest in a deposit account owned by a consumer debtor, where the deposit account is held by another bank, is to enter into a three party "control agreement" with the debtor and the financial institution where the deposit account is maintained.
5. The Revision does allow the use of a "generic description" of collateral, but to be effective the collateral must be specifically defined in the financing statement in order to give notice to third parties, who are conducting searches, of the type of collateral in which the secured party is claiming an interest.
6. After July 1, 2001, a prospective secured party will need to only check in one filing office to determine if any other parties are claiming a security interest in the collateral offered by a debtor as security for a loan.
7. The effective date for Revised Article 9 in all states is July 1, 2001.
8. Revised Article 9 requires the central filing office to be located in the Office of the Secretary of State.
9. It is possible for a secured party to file a valid financing statement that has not been signed by the debtor.
10. The Revision makes it possible to perfect a security interest in a tort claim, such as a consumer personal injury claim.
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