Credit Survival Guide: UCC Filings

Credit Survival Guide: UCC Filings

You go out on a limb and sell to a new customer. As an experienced credit professional, you aren’t worried about working with this customer because you have a UCC filing program to lower your DSO, increase your sales, and to elevate your creditor status to a secured creditor.

A couple years down the line, your customer files for bankruptcy. You think you’re in good shape because you used a UCC filing to secure your transaction.

But it turns out that your debtor’s business not only changed ownership, but changed names, without informing you. With incorrect information on your UCC filing, you are left as an unsecured creditor.

This is a very common and frustrating situation for creditors. Whether or not you’ve been burned this way before, here are a few tips to avoid collecting pennies on the dollar or, even worse, a write-off.

Where do you start?

Tip #72: Know Your Debtor

You have your Security Agreement/Credit Application signed by your customer (the Debtor) and are ready to file your UCC-1. Before you file, make sure the customer’s legal name is listed on your Agreement. Many times, Debtors will list their DBA names on the Agreement, which could be a problem in the event of a bankruptcy.

For registered entities, make sure the legal name as shown on their Articles of Incorporation is listed on the signed Agreement. If filing on a Sole Proprietor, the Agreement should show the individual’s full legal name, as reflected on their unexpired driver’s license.

You can also list a DBA name, but it isn’t required for the UCC filing. If filing on a partnership, make sure that both partners have signed the Agreement and their full legal names are reflected as well. The UCC-1 is a public record of your signed Agreement so the information on both documents should match and reflect the correct information for your Debtor.

My UCC is filed and I made sure all of my debtor information is accurate. I’m good to go, right? Not quite.

Tip #62: Reflective Searches Can Keep You Ahead of the Game

Often times, we take for granted when a UCC is instantly recorded online that all is well. BUT how do you know your filing will actually show up on a UCC-11 search? Each secretary of state office has their own software to house UCC filings that sometimes can be unreliable or outdated.

The only way to determine if your UCC filing is indexed correctly is to conduct a Reflective Search. If that Reflective Search does not display the filing, you have a problem.

In addition to making sure your UCC filing is correctly indexed, monitor your debtor for any changes to avoid an amendment of your filing.

Tip #35: Monitor for Name Changes

Are you aware that if your customer changes their name, you must amend your UCC Filing or your security is jeopardized? Section 9-507 (c) of the UCC tells us that we have 4 months to amend our UCC filing when the debtor name changes. If not, the UCC filing is not effective to perfect a security interest in collateral acquired by the debtor before or within four months after the change.

Make sure your Security Agreement requires the debtor to advise you of any changes to name, address, or organizational structure. It is the secured party’s responsibility to ensure the UCC filing is updated and contains the correct information. Best practice is to monitor your customer for change.


Filling inaccuracies and unreported changes to name, address, or organizational structure can jeopardize the security of your UCC filing. The experts at NCS are well versed in every state’s search logic and can alert you to indexing errors, making sure your filing is accurate.

Ask about NCS Corporate Monitoring Service! Corporate Monitoring provides an email notification to alert you of an entity name or status change and NCS will recommend what you need to do to retain your secured position.

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