UCC 9-316 perfection lapse question - equipment financing mess
So I'm dealing with a situation where we had equipment financed across state lines and I think we might have a UCC 9-316 issue brewing. The debtor moved their main operations from Ohio to Tennessee about 8 months ago, and we filed the original UCC-1 in Ohio back in 2021. I just realized we might have missed the 4-month window to refile in Tennessee to maintain continuous perfection. The equipment is worth about $180K and I'm freaking out because if our lien isn't perfected anymore, we could be in serious trouble if the debtor defaults. Has anyone dealt with UCC 9-316 continuation requirements when a debtor relocates? I'm trying to figure out if we can still fix this or if our security interest has already lapsed. The debtor hasn't defaulted yet but their payments have been getting later and later.
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Dallas Villalobos
Oh no, this is exactly the kind of situation that keeps me up at night. UCC 9-316 is pretty strict about that 4-month window. If the debtor moved 8 months ago and you haven't refiled in Tennessee yet, you might have lost perfection 4 months after the move. But don't panic completely - you need to check the exact date of the move versus when you can still file.
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Melina Haruko
•The move happened in March, so we're definitely past the 4-month deadline. Does that mean we're completely unperfected now? I'm trying to understand if there's any way to salvage this.
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Reina Salazar
•Unfortunately yes, if March + 4 months puts you past July and you're now in November, your perfection likely lapsed. You can still file now but you won't have continuous perfection from the original filing date.
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Saanvi Krishnaswami
UCC 9-316 is brutal on this stuff. When a debtor changes their location (which for registered organizations means changing their state of incorporation or formation), you have exactly 4 months to refile in the new jurisdiction or your perfection lapses. After 8 months, you're looking at an unperfected security interest. You should still file in Tennessee immediately to perfect going forward, but you've lost the continuous perfection chain.
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Melina Haruko
•So if I file in Tennessee now, at least I'll be perfected from this point forward? That's something I guess. Is there any chance other creditors could have jumped ahead of me during the gap period?
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Saanvi Krishnaswami
•Exactly - file now to protect yourself going forward. And yes, any creditor who perfected during your gap period would have priority over you. Check Tennessee UCC records to see if anyone else has filed.
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Demi Lagos
•This is why I check debtor locations religiously every quarter. One missed move and boom - priority issues.
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Mason Lopez
I had something similar happen with a debtor who moved from Florida to Georgia. We caught it at month 3 thankfully, but I learned that you really need systems in place to track debtor relocations. For equipment financing especially, UCC 9-316 can kill your deal if you're not careful about the timing requirements.
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Melina Haruko
•How do you usually track when debtors move? Do you have them notify you contractually or do you monitor somehow?
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Mason Lopez
•We require notice in the loan docs and do quarterly Secretary of State checks on corporate debtors. For equipment, we also do annual inspections which sometimes catch relocations.
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Vera Visnjic
I actually discovered Certana.ai recently when I had a similar multi-state filing mess. You can upload your original UCC-1 and any new filings to verify everything aligns properly - it caught a debtor name inconsistency between our Ohio and new Tennessee filing that could have caused problems. Really helpful for making sure your refiling actually maintains the security interest properly.
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Melina Haruko
•That sounds useful. I'm worried about getting the debtor name exactly right on the Tennessee filing since there might be slight variations from the original Ohio filing.
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Vera Visnjic
•Exactly why I used it. Just upload both documents and it instantly flags any inconsistencies. Saved me from a potential debtor name mismatch that would have made the refiling ineffective.
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Jake Sinclair
•Never heard of that service but sounds like it could prevent a lot of headaches with multi-state filings.
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Brielle Johnson
UCC 9-316 doesn't mess around with those deadlines. I've seen deals go sideways because someone missed the 4-month window. The good news is equipment financing usually means you can still repossess if you have to, even if your UCC filing priority got messed up. But definitely get that Tennessee filing done ASAP.
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Melina Haruko
•True, we do have the equipment as collateral so repossession is still an option. But I'd much rather have a properly perfected security interest.
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Brielle Johnson
•Absolutely. Perfection gives you so many more options and better priority. Get that Tennessee UCC-1 filed this week if possible.
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Honorah King
Wait, I thought you had longer than 4 months if it was just an address change? Or is this specifically when they change their state of formation?
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Saanvi Krishnaswami
•UCC 9-316 is specifically about changes in the debtor's location for filing purposes. For registered organizations, that means changing state of incorporation/formation, not just a physical address change.
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Honorah King
•Ah okay, that makes more sense. So if they just moved offices within Ohio it wouldn't trigger the 4-month rule?
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Saanvi Krishnaswami
•Correct. Moving offices within the same state doesn't affect where you file UCCs. It's only when the legal entity location changes.
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Oliver Brown
This is exactly why I hate multi-state deals. The UCC rules are confusing enough without having to worry about 9-316 continuation requirements. At least with single-state deals you file once and you're done (until continuation time).
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Melina Haruko
•Yeah, I'm definitely going to be more careful about tracking debtor locations going forward. This has been a wake-up call.
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Reina Salazar
•Multi-state definitely adds complexity but equipment financing often involves debtors who expand across state lines. Just need better tracking systems.
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Mary Bates
I've been doing UCC filings for 15 years and UCC 9-316 trips up even experienced folks. The key takeaway is that you need to monitor debtor entity status changes religiously. Once you know about a relocation, you have that 4-month window - no extensions, no grace periods. File in Tennessee now to at least protect yourself going forward, and hope no other creditors jumped in during your gap period.
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Melina Haruko
•I'm going to file first thing Monday morning. Lesson learned on monitoring debtor locations. Thanks for the reality check.
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Mary Bates
•Good plan. And consider putting location monitoring requirements in your loan agreements so debtors have to notify you of entity changes.
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Clay blendedgen
•We require 30-day advance notice of any entity changes or relocations. Helps catch these issues before the 4-month clock runs out.
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Ayla Kumar
Tennessee Secretary of State filing system is pretty straightforward at least. Should be able to get your UCC-1 filed quickly once you have the right debtor information. Make sure you're using their exact legal name as it appears in Tennessee records.
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Melina Haruko
•Good point about the exact legal name. I'll need to pull their Tennessee entity information to make sure I get it exactly right.
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Ayla Kumar
•Definitely. Tennessee SOS website has good entity search functionality. Get the exact legal name and entity number if they have one.
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Lorenzo McCormick
Just to add another perspective - even though you missed the 4-month window, you're not completely out of options. File the Tennessee UCC-1 immediately, document when you discovered the relocation, and consider if your loan agreement has any additional protections. Equipment liens can sometimes be maintained through other means even if UCC perfection lapses.
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Melina Haruko
•That's a good point about other protections in the loan agreement. I should review what other security we have besides the UCC filing.
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Lorenzo McCormick
•Exactly. Title documents, security agreements, personal guarantees - all of those can still provide protection even if UCC priority gets messed up.
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Carmella Popescu
•Plus equipment financing deals often have pretty strong default and acceleration clauses that can help if things go south.
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Kai Santiago
I ran into a similar UCC 9-316 issue last year and ended up using one of those document verification services to make sure my refiling was done correctly. There are tools that can cross-check your original filing against the new state requirements to catch potential issues before they become problems. Worth looking into if you want to be extra careful with the Tennessee filing.
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Melina Haruko
•Which service did you use? I want to make sure this Tennessee filing is bulletproof since I already messed up the timing.
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Kai Santiago
•I used Certana.ai - you just upload your documents and it flags any inconsistencies or potential issues. Really helped catch things I would have missed.
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Lim Wong
UCC 9-316 is one of those provisions that seems simple until you actually have to deal with it. Four months sounds like plenty of time until you realize you weren't even tracking the debtor's entity status. File in Tennessee this week and put systems in place to prevent this from happening again on future deals.
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Melina Haruko
•Absolutely. This has been an expensive lesson but at least the debtor hasn't defaulted yet so I have time to clean things up.
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