UCC Filing Expiration - What Happens When Your Filing Lapses?

This is correct but I'd add that you want to file the continuation statement well before the deadline, not at the last minute. Some states have processing delays and if there's any issue with the filing, you want time to correct it before the lapse date.

Exactly right about the 6 month window. We always set calendar reminders 8 months before expiration to start the continuation process. Better safe than sorry when you're dealing with six-figure loan amounts.

That's exactly what I'm worried about. We have too much at stake to risk losing our secured position. I'm going to start preparing the UCC-3 continuation today.

Good call. Also double-check your collateral description while you're at it. If the borrower has changed their equipment significantly, you might want to consider filing an amendment along with the continuation.

That sounds really useful. How does the document comparison work exactly? Do you just upload PDFs and it highlights differences?

Yeah, exactly. You can upload the original UCC-1 and any updated asset lists or schedules, and it cross-checks debtor names, collateral descriptions, serial numbers, everything. It's particularly helpful for catching those subtle changes that you might miss when reviewing manually.

This is interesting. We usually do manual reviews but with multiple loans and filings, it's easy to miss details. Might be worth checking out for our continuation filings.

Great point about the debtor name. We had a continuation rejected because the company had done a minor name change and we used the old name from the original UCC-1. Had to file an amendment first, then the continuation.

Most states are pretty strict about the debtor name matching exactly. Even something like adding 'LLC' or changing 'Inc.' to 'Incorporated' can cause issues.

And once you file the continuation, your security interest is continuous. There's no gap in perfection as long as you file before the expiration date.

We always file continuations at least 3 months before expiration. Gives us time to fix any issues if the filing gets rejected for technical reasons.

You'll want to file an amendment first to correct the debtor name, then file the continuation. Most states don't allow you to combine those functions in a single UCC-3 form.

Check your state's specific requirements. Some states have been updating their systems to allow combination filings, but the safer approach is to file them separately to avoid any rejections.

Ouch, that's exactly the scenario that keeps lenders up at night. Did you consider filing a new UCC-1 after you realized the lapse?

We tried but by then other creditors had filed and we lost our priority position. The gap in perfection killed us. Always better to file the continuation on time.

This is why we use automated reminder systems now. Too much risk to rely on manual calendar tracking when you're dealing with substantial loan amounts.

The continuation extends the effectiveness for 5 years from the original expiration date, not from when you file the continuation. So if your original UCC was set to expire in March 2025, the continuation extends it to March 2030.

Exactly right. That's why you want to file within that 6-month window - it maintains the continuous perfection timeline.

Those email notifications are a lifesaver. We get alerts at 12 months, 6 months, and 3 months before expiration. Takes the guesswork out of UCC maintenance.

Some states are better than others with their notification systems. We still maintain our own internal tracking system as backup.

Address changes can definitely cause problems. Good catch on using the verification tool. We've had continuations rejected for less obvious discrepancies.

That's smart. Better to catch those issues before filing than to deal with rejections and time pressure. Especially when you're already cutting it close to the expiration date.

Good luck with the filing! You've got this. Just double-check all the details before submitting and you should be fine.

Let us know how it goes. Always good to hear success stories for others who might be in similar situations.

This is excellent advice about jurisdiction and collateral description! As someone new to UCC filings, I hadn't considered that the borrower's location change could affect where the continuation needs to be filed. The point about broadening the collateral description to "all equipment" instead of specific serial numbers is really smart too - gives much better coverage for businesses that regularly upgrade their machinery. Thanks for sharing this insight, it's exactly the kind of practical wisdom that helps avoid costly mistakes!

Great point about the jurisdiction issue! I've seen this trip up lenders who don't realize their borrower relocated their principal place of business. @Emma Anderson - do you know if there s'a specific timeframe after a borrower moves where you need to refile in the new state? I m'dealing with a similar situation where our borrower moved from Delaware to Texas last year and I m'not sure if our Delaware filing is still valid or if we need to file a new UCC-1 in Texas.