The collateral description is a critical piece of a UCC Financing Statement. This section is where a secured party details what items the debtor has offered as collateral to secure the loan. In many cases, secured parties elect to put their collateral description on an attachment rather than within the confines of Box 4 on the UCC Financing Statement form. Attachment pages are particularly common when the transaction requires a lengthy equipment or inventory list.

When attachment pages are included with a UCC document, the face page will reference the attached documents. Sometimes however, attachment pages are missing from a UCC Financing Statement that is presented for filing and this can be dangerous for the secured party. Here’s why:

May Not Cause a Filing Office to Reject a Document

There are situations where a missing attachment would not cause a filing officer to reject a document. For example, imagine some of the pages a secured party meant to attach actually made it to the filing office, but others did not. Maybe the staple did not hold or perhaps they forgot to attach the pages before sending.

According to the Uniform Commercial Code, the collateral description must reasonably identify the collateral. A UCC filing with missing attachment pages may fail to adequately describe the collateral and that could put the secured party at risk if there should ever be a competing claim against their position.

May be Cause for a Filing Officer Rejection

There are other times though, when a filing officer would reject a filing that is missing attachment pages. Consider for example an instance where a UCC Financing Statement references an attachment, but has nothing at all attached. In this case, it is likely that a filing officer would notice this when reviewing the document, conclude that the UCC contained no collateral description and reject the document.

Rejected filings can be dangerous to a secured party because during the time it takes them to correct their document and resubmit it to the filing office, the door is open for another party to claim a priority position. If you are filing UCCs with attachment pages, be sure to carefully review every page of the attachment before sending the document to the filing office.

Every UCC filing submitted through the First Corporate Solutions online UCC filing and portfolio management system, File n’ Track, undergoes a rigorous quality review to check for potential filing mistakes including obvious typographical errors and missing attachment pages. Contact us today for a free system demo! 800.406.1577 | info@ficoso.com

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