What does a UCC filing cover?
Asked by: Mr. Leonel Oberbrunner | Last update: October 18, 2025Score: 4.6/5 (32 votes)
The UCC is a set of laws concerning commercial transactions, such as the sale of goods. It also covers secured transactions, where a lender gains the right to foreclose on a borrower's collateral should the borrower default on the loan. This is also called a security interest.
What is the purpose of an UCC filing?
Uniform Commercial Code (UCC) filings allow creditors to notify other creditors about a debtor's assets used as collateral for a secured transaction. UCC liens filed with Secretary of State offices act as a public notice by the "creditor" of the creditor's interest in the property.
What is covered under the UCC?
The UCC applies mostly to commercial transactions, including sales and leasing of goods, banking transactions and investment securities. However, there are other types of transactions where the UCC doesn't apply.
What transactions does the UCC cover?
The Uniform Commercial Code (UCC) is a set of business laws that regulate financial contracts and transactions across state lines. The UCC was created and championed by state officials, not federal agencies. The code consists of nine articles covering aspects of banking and loans.
What cases does UCC apply to?
The UCC is applicable in sales, leases, negotiable instruments, bank deposits, funds transfers, letters of credit, bulk transfers and bulk sales, warehouse receipts, bills of lading and other documents of title, investment securities, and secured transactions of commercial transactions.
What is a UCC Filing? What you need to know! [UCC-1 lien]
What services are not covered by the UCC?
- the sale of goods.
- the lease of goods.
- the use of negotiable instruments.
- banking transactions.
- letters of credit.
- documents of title for goods.
- investment securities, and.
What is the UCC for dummies?
The UCC is a set of laws concerning commercial transactions, such as the sale of goods. It also covers secured transactions, where a lender gains the right to foreclose on a borrower's collateral should the borrower default on the loan. This is also called a security interest.
What does the UCC not apply to?
There are two large categories of transactions where the UCC does not apply: services and real estate transactions. The idea is that services and real estate transactions have a lot more nuances than could be covered in the UCC and are better handled by the common law approach.
What is the most important UCC rule?
Within the code one of the most important articles is Article 9, Secured Transactions, which provides the governing rules for any transaction that combines a debt with a creditor's interest in a debtor's personal property.
What is an example of a UCC?
The sale of 1,000 widgets from one company to another is a good example of a UCC application. UCC lien against collateral. A lien can be described as a right to keep a certain property belonging to another person until they pay a debt they own. UCC lien is a claim against business assets.
What goods fall under UCC?
UCC, Article 2, Section 2-102 states that Article 2 applies only to goods transactions. The UCC definition of goods is set out in Article 2, section 2-105 as "all things ... which are movable ... other than money ... investment securities, and things in action.
How do I know if I have a UCC filing against me?
Searching Secretary of State Records Online
Most states have online directories of UCC filings available on the secretary of state's website. These directories provide basic information on whether a UCC filing exists.
What happens if a tender of payment is refused by the creditor?
When a creditor refuses a tender of payment, it does not cancel the debt. Instead, the legal obligation to repay remains in effect, and the debtor must still fulfill their obligation to pay. This means that the debt is not canceled and can still be enforced against the debtor.
What is the general purpose of the UCC?
Summary. The Uniform Commercial Code (UCC) is a comprehensive set of laws governing all commercial transactions in the United States. It is not a federal law, but a uniformly adopted state law. Uniformity of law is essential in this area for the interstate transaction of business.
Can an UCC lien take money from your bank account?
A creditor with a UCC lien against your assets could go after things like cash from your bank account, your car or personal property, and any assets in the UCC-1 filing. States place rules to protect equity of your home, a personal vehicle, retirement funds, and business equipment.
Who can terminate a UCC filing?
The secured party has 20 days to either terminate the filing or send a termination statement to the debtor that the debtor can then file. If this does not happen within the 20-day time frame, the debtor may file a UCC-3 termination statement.
What are UCC requirements?
Legal requirements for the UCC-1
In order for a UCC-1 to hold weight in a legal proceeding, it must include the exact legal name of the debtor, the collateral included in the lien and the name of the secured party. When listing collateral, the law doesn't require a detailed description.
What are the disadvantages of the UCC?
One of the main disadvantages of the UCC is that it is not always uniform across all states. Different states may adopt different versions of the UCC, making it difficult for businesses to comply with all the regulations. This can create confusion and uncertainty in the marketplace, particularly for smaller businesses.
What are the three requirements for a creditor to have an enforceable security interest?
In order to have an enforceable security interest, the party's security interest must first "attach." Attachment occurs when (1) the creditor gives value, (2) debtor has rights in the collateral, and (3) there is an authenticated and signed security agreement, or the party takes control or possession of the collateral.
What transactions fall under UCC?
Contract law is governed by the common law and the Uniform Commercial Code "UCC." Common law governs contractual transactions with real estate, services, insurance, intangible assets and employment. UCC governs contractual transactions with goods and tangible objects (such as a purchase of a car).
How do I know when the UCC rules would apply?
The UCC will not apply to your contract unless the agreement meets one of the following criteria: Goods: Article 2 of the UCC, which governs contracts, limits its application to contracts involving the sale and purchase of goods valued at $500 or more.
Can you opt out of the UCC?
The parties are almost always allowed to “contract out of the UCC.” If the merchants do discuss and agree to terms different from the UCC, then the parties' own terms will apply. The UCC takes a very pragmatic and common sense approach to commercial transactions.
Why would someone have a UCC filing?
A Uniform Commercial Code filing, also known as a UCC filing or UCC-1 financing statement, is a document that lenders use to establish their legal right to assets that a borrower uses to secure a loan. This notice allows the lender to seize the borrower's collateral in the case of default.
What can a secured party creditor do?
Understanding Secured Creditors
If a borrower defaults on a secured credit product, the secured creditor has a legal right to the secured asset used as collateral. The secured asset may be seized by the secured creditor and sold to pay off any remaining obligations.
What are the rights of a UCC filing?
A UCC filing, or Uniform Commercial Code filing, is a legal form filed by a creditor when you use assets to secure a business loan. The filing establishes the creditor's legal right to seize the collateral in the event you default on the loan.