Whether for commercial purposes or personal matters, everyone faces legal circumstances at some stage in their life.
Filling out legal documents demands meticulous attention, starting with choosing the appropriate form template.
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After a loan has been paid off, a borrower has the responsibility of asking the lender to remove the UCC filing on the loan.
How long does a UCC filing last? A UCC-1 filing is good for five years. After five years, it is considered lapsed and no longer valid. Should your debtor remain in debt to you and encounter financial difficulty or file for bankruptcy, you have no secured interest if your UCC-1 filing has lapsed.
It's possible to avoid a UCC filing by taking out an unsecured business loan rather than a secured one. For example, many online and alternative lenders offer unsecured loans, and you can get an SBA 7(a) loan of up to $25,000 without collateral.
Ask the lender to terminate the lien upon payoff. A good rule of thumb is to request that your lender file a UCC-3 form with your secretary of state as soon as possible after you pay off your loan. The UCC-3 will terminate the lien on your company's assets (or assets) and remove the UCC-1 filing.
Upon lapse, a Financing Statement ceases to be effective and any security interest or agricultural lien that was perfected by the Financing Statement becomes unperfected, unless the security interest is perfected otherwise.
The UCC clearly permits a creditor to use successive, timely filed, continuation statements to maintain perfection for an unlimited period of time?all the creditor has to do is keep filing a continuation every five years.
Ask the lender to terminate the lien upon payoff. A good rule of thumb is to request that your lender file a UCC-3 form with your secretary of state as soon as possible after you pay off your loan. The UCC-3 will terminate the lien on your company's assets (or assets) and remove the UCC-1 filing.
Lapsed UCC filing: The filing has passed its effective period and no continuation has been filed. Purged UCC filing: The filing has been removed from the index and is no longer searchable in most state systems.