THE PROCESS OF FILING & LATER FILINGS AND CHANGES IN THE SITUATION Flashcards
What constitutes filing?
The Process of Filing & Later Filings and Changes in the Situation
Communication of a record to a filing office and tender of the filing fee or acceptance of the record by the filing office constitutes filing UNLESS the filing office refuses to accept because:
(1) the record is not communicated by a method or medium of communication authorized by the filing office;
(2) an amount equal to or greater than the applicable filing fee is not tendered;
(3) the filing office is unable to index the record because the record does not provide a name for the debtor
What is required for filing?
The Process of Filing & Later Filings and Changes in the Situation
A person may file a financing statement only if: (1) the debtor authorizes the filling in an authenticated record covering the collateral described in the security agreement
The Process of Filing & Later Filings and Changes in the Situation
A filling office SHALL refuse to accept and may ONLY refuse to accept if: (1) the record is not communicated by a method or medium of communication authorized by the filing office; (2) an amount equal to or greater than the applicable filing fee is not tendered; (3) the filing office is unable to index the record because the record does not provide a name for the debtor
The impact of filing office mistake
The Process of Filing & Later Filings and Changes in the Situation
The failure of the filing office to index a record correctly does not affect the effectiveness of the filed record.
Imposes the risk of filing office error on those who search the files rather than on those who file.
Time period an original filing statement is good
The Process of Filing & Later Filings and Changes in the Situation
Generally a filed financing statement is effective for a period of five years after the date of filling
When a continuation statement must be filed
The Process of Filing & Later Filings and Changes in the Situation
A continuation statement must be filed only within six month before the expiration of the five-year period in which the original filing statement is good
Effect of lapse of filing statement
The Process of Filing & Later Filings and Changes in the Situation
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. It is deemed never to have been perfected as against a purchaser of the collateral for value.
Impact of a security interest on goods
The Process of Filing & Later Filings and Changes in the Situation
When a buyer purchases goods, he takes them free of any security interest if he gives value and receives delivery of the collateral without knowledge of the security interest BEFORE it is perfected
How long a security interest remains perfected
The Process of Filing & Later Filings and Changes in the Situation
The earliest of: (1) the time perfection would have ceased under the law of that jurisdiction, (2) the expiration of four months after a change of the debtor’s location to another jurisdiction, or (3) the expiration of one year after a transfer of collateral to a person that thereby becomes a debtor and is located in another jurisdiction
