First Corporate Solutions Blog | UCC, Corporate, Lien, Litigation, Title | Search, Filing, Monitoring » Litigation Research

Where to Search for Tax Liens

First Corporate Solutions Team — Tue, 27 Sep 2011 17:06:49 +0000

In previous blog posts, we have discussed the importance of searching for tax liens as part of a standard pre-funding due diligence investigation. To recap, there are two main reasons why it is critical to search for tax liens. First, tax liens are a factor in determining priority of claims and secondly, they are involuntary in nature, meaning that a debtor may not even be aware of a lien’s existence. As with any public record search, it is important to perform tax lien searches in the right filing offices. What follows is an overview of where to search for tax liens.

For tax liens, the taxpayer’s principal address determines the filing location. When searching for tax liens then, you will search in the state where the taxpayer holds their principal address. It gets a little tricky though. There are no nationwide rules for what filing office administers tax lien records; rather each state independently decides where tax liens will be filed in their jurisdiction. Within the state where the taxpayer holds their principal address, a tax lien may be filed at the state-level, or the county level, or sometimes both.

State governments attempt to set standards for where tax liens are to be filed based on whether the taxpayer is a business or individual. However, when searching the tax lien records, we tend to find them mixed together regardless of what records the filing office is supposed to administer, regardless of whether the taxpayer is a business or individual.

In California for example, according to statute tax liens on businesses are filed at the Secretary of State’s office while tax liens on individuals would be filed at the County Recorder’s office. What we actually find though is that both filing offices accept liens on businesses and individuals. As a result, an exhaustive tax lien search here would include a search of both the state and county filing offices.

Another important thing to keep in mind when searching for tax liens is that they may be maintained on a separate index from a filing office’s UCC records. In these cases, a separate search of that secondary index will be required to locate involuntary liens.

Tax Lien and Judgment Lien searching can be confusing because of all of the different variables that come into play. It’s a good idea to work with a service provider you trust to carry out your tax lien searches. First Corporate Solutions works with a highly trained network of local search agents to deliver search results you can count on. Contact us today to learn more about our nationwide search services or to place your order today! 800.406.1577 | info@ficoso.com

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Refer to Organizing Paperwork for Legal Name of a Business Debtor

First Corporate Solutions Team — Mon, 12 Sep 2011 18:15:21 +0000

According to the Uniform Commercial Code, a UCC Financing Statement is only effective if it gets the debtor name right. A UCC Financing Statement that fails to properly identify the debtor by their legal name will not offer the secured party priority status to collect should the debtor default or file for bankruptcy.

The Code goes on to say that for registered business debtors, the name that should appear on a UCC Financing Statement is the name that appears in the public record in the state where the business is organized. The prevailing opinion among UCC scholars is that, in this context, “public record” means a business’s formal organizing paperwork such as articles of incorporation/organization or partnership agreement.

These days, states filing offices and many private service companies, are making business entity data available online. As a result, a trend has emerged where we find UCC filers looking to an online business entity database to determine an entity’s legal name. Here on the First Corporate Solutions Blog, we want to take a quick moment to emphasize that it really is best practice to view the actual, organic formation documents (including any related amendments or mergers), rather than relying on an online database to determine the legal name of a business debtor.

On the surface, an online business entity database may seem like a low cost alternative to obtaining copies of formation documents, but in fact, trusting online business data can pose a real threat to a secured party’s perfection. In an online database, words may have been abbreviated or typographical errors committed that would cause a secured party to put the wrong name on their UCC Financing Statement, setting them up for a potential future loss should the secured party ever have to fend off a challenge from a competing creditor.

In many cases, you can get a copy of a company’s organizing paperwork from your applicant, but for those times when they need to order copies of a company’s formation documents, First Corporate Solutions offers affordable, nationwide retrieval of business documents. Contact us today to place your order at 800.406.1577 or info@ficoso.com.

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Costs for Performing a UCC, Lien, Litigation or Bankruptcy Search

First Corporate Solutions Team — Tue, 23 Aug 2011 01:16:53 +0000

One of the most common areas of confusion relating to public records searching has to do with the costs incurred for search requests, particularly those requests that a customer places with a private service company. The fees associated with this type of research are varied and an invoice may use terminology that is unfamiliar to those with infrequent searching needs. Herein, we offer some guidelines for what types of fees you can expect when placing a service request with a service company.

Service Fees

Due diligence service companies are for-profit businesses who employ public records experts to assist you in navigating the complex world of public records. When you utilize a service company to fulfill your search request, there will be a charge for their services. Typically, a service company will charge for their services on a per name, per jurisdiction basis. This means that every individual service they perform will carry a separate charge.

Correspondent or Vendor Charges

With 50 states, plus Washington D.C. and over 3000 counties in the United States, no service company can physically visit every filing office in the country to perform your service request personally. In areas where a service provider doesn’t have a physical presence, they will enlist a local vendor to complete your service request. The local vendor will charge for their services, and your service provider will pass those fees along to you as a correspondent or vendor charge.

Jurisdictional or Statutory Fees

Public records must be available to the general populace, but there is no rule that states the records must be available free of charge. In some cases, a service company may need to advance funds on your behalf to the filing office where the search is performed; a certified search is a good example of this type of occasion. A jurisdictional fee, sometimes referred to as a statutory fee, is an out of pocket expense that your service provider has already paid directly to a filing office in order to complete your service request, and is an example of another pass along fee you may incur.

Copy Costs

A search company’s service fee is the cost for them to complete the required research and generate a report of their findings. If you need to view copies of the items that the search effort uncovered, your service provider will need to obtain copies and you can expect to incur a copy cost. Most service companies charge for copies on a per page basis; be mindful that copy costs can add up quickly.

First Corporate Solutions offers competitive pricing and no hidden fees. Contact us today for a free consultation! 800.406.1577 | info@ficoso.com

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Update: Minnesota Secretary of State To Remain Open

First Corporate Solutions Team — Fri, 01 Jul 2011 23:23:23 +0000

The Secretary of State’s office in Minnesota will remain open during the government shutdown. All Secretary of State services will remain available, including UCC search and filing services, business filings and retrievals, and authentications. Read the Secretary of State’s press release here.

Remember to check the First Corporate Solutions blog regularly for jurisdictional updates and other alerts that may affect your business.

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Civil Litigation Searching – What Court Should I Search?

First Corporate Solutions Team — Fri, 09 Jul 2010 22:42:07 +0000

In a recent blog post titled, “Ordering a Civil Litigation Search: 5 Pieces of Information Your Searcher Will Need From You,” we mentioned that when ordering a litigation search, your searcher will be expecting you to provide direction as to which specific court they should visit. Several readers responded, saying that they could use some help figuring out what court to search. First Corporate Solutions cannot offer any legal advice in terms of telling customers where to perform their searches, but we can provide some basic information about common customer searching practices and what types of cases are found at certain courts.

When performing civil litigation searches as part of a pre-funding due diligence investigation, we find that most customers elect to search the State Court of General Jurisdiction. For a more comprehensive search effort, many will also add a search of the U.S. District Court.

State Court of General Jurisdiction

These courts are the primary trial courts of the state court system. Each state manages its state court system differently and this level of court goes by many different names such as: Superior Court, Court of Common Pleas, Circuit Court etc.

A State Court of General Jurisdiction hears a variety of case types including: most criminal cases, personal injury matters and contract cases (uscourts.gov).

U.S. District Court

These are the trial courts of the federal court system. There are ninety-four U.S. District courts throughout the nation and various U.S. territories. Every state has at least one U.S. District Court, some having as many as four.

Many different types of cases can be found at a U.S District Court including: civil actions that cross state lines and criminal cases filed by the United States (uscourts.gov)

Litigation searching can be complex. It is best practice to speak with your firm’s risk management department or your attorney before ordering a litigation search to determine what searches will yield the greatest benefit for your transaction.

To learn more about the U.S. Court system, visit their website www.uscourts.gov.

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Civil Judgments vs. Judgment Liens: What’s the Difference?

First Corporate Solutions Team — Thu, 25 Jun 2009 20:25:28 +0000

If you’re like me when I was first introduced to this industry, you might be a little confused about the difference between judgments and judgment liens. They are two separate animals, and it’s important to know the difference if you’re trying to determine which to search for when doing your due diligence.

The easy definition is that a judgment is an official decision rendered by the court with regard to a civil matter. A judgment lien, sometimes referred to as an “abstract of judgment,” is an involuntary lien that is filed to give constructive notice and is to attach to the Judgment Debtor’s property and/or assets.

When we’re talking about a judgment, it’s up to the winning party to enforce or collect upon the judgment. A copy of the judgment itself will be filed with the court where the case was heard.

If the judgment debtor (losing party from the civil case) fails to voluntarily satisfy the judgment, a judgment lien is a way to ensure that the court’s judgment is enforced. A judgment creditor (winning party from the civil case) will file the lien against the judgment debtor in order to secure their position to collect on the debt they are owed as a result of the civil judgment. In general, the lien is satisfied with the sale proceeds when the debtor sells the property or when a refinance occurs.

It’s important to note that searching the court for civil judgments will not uncover judgment liens, and the liens are what will jeopardize the creditor’s priority position to collect, much like a UCC filing. If you’re searching as due diligence for a financial transaction, it’s always a good idea to search the proper filing office for judgment liens to protect your interests.

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