In this issue of Community Banker, we revisit one of the most fundamental — and most error-prone — areas of secured transactions: debtor names on UCC financing statements.

YOU ARE ASKING …
Q: How critical is it to get the debtor’s name exactly right on a UCC financing statement, and what happens if there’s even a minor typo?

A: The debtor name is everything. UCC financing statements are indexed by debtor name, and any error, omission, or variation can prevent a searcher from locating the record. Under N.D.C.C. § 41-09-74 (UCC § 9-503), the rules depend on whether the debtor is a registered organization, an individual, a trust, or another entity. A misspelling or formatting mistake may render a filing “seriously misleading” and ineffective, leaving the secured party unperfected. While some state search logics catch small quirks, you can’t rely on happy accidents. In one case, a creditor’s lien was lost because of nothing more than an extra space typed before a period in the debtor’s name.

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