On July 1, 2013, important amendments to Indiana’s UCC Commodity 9 will booty effect. These amendments abundantly track recommended changes that the Uniform Law Commission and the American Law Institute promulgated in 2010. The changes address filing issues and added apropos that accept arisen during several years of acquaintance with the aftermost overhauled adaptation of Commodity 9, accomplished in 2001. What follows is a arbitrary of the more cogent changes, forth with a abrupt abridgment of anchored party considerations:
Amended IC 26-1-9.1-503(a) provides added admonition on how to actuate an alone debtor name that is to arise on a costs account filed in Indiana. Instead of acute the “individual name” of an alone debtor, afterwards July 1, a costs account will abundantly accommodate the name of an alone debtor alone if it provides the name that is apparent on the debtor’s best afresh issued, unexpired Indiana driver’s authorization or, if the debtor does not accept an unexpired Indiana driver’s license, the name that is apparent on the debtor’s best afresh issued, unexpired Indiana identification agenda for non-drivers; but, if the debtor has neither an unexpired Indiana driver’s authorization nor an Indiana identification card, alone if the costs account provides the alone name of the debtor or the surname and aboriginal claimed name of the debtor. Note that this change (known as the “only-if” rule) represents “Alternative A” of the Uniform Law Commission’s recommended amendments to Commodity 9; a abate cardinal of states accept adopted instead to accept “Alternative B,” which provides a beneath belted access to free an individual debtor’s name.
To allegorize the appliance of Alterative A, accept an individual, whose arch abode is amid in Indiana, obtains a accommodation on Sept. 1, 2013 from ABC Bank that is anchored by assertive declared claimed property. The borrower’s name, as it appears on his unexpired Indiana driver’s license, is Jim Spaulding, and this name is the debtor name that appears on the accompanying costs account filed with the Indiana Secretary of Accompaniment on Sept. 1, 2013. So far, so good. However, in the year 2014 and afore Jim repays the loan, his Indiana driver’s license expires, he does not renew it, he does not access an Indiana identification card, and he continues to abide (principally) in Indiana. Now, as continued as his name on the costs account is additionally his alone name or his surname and aboriginal claimed name, again his name on the costs account is sufficient. Commodity 9 does not ascertain an “individual name” or “surname and aboriginal claimed name” nor does it accommodate specific admonition on how to actuate an alone name or surname and aboriginal personal name. If Jim has a government-issued bearing affidavit that shows his name as James Michael Spaulding, a amusing aegis agenda that shows his name as James M. Spaulding, and a authorization that shows his name as James Spaulding, Jr., again the accomplishment of ABC Bank’s aegis absorption in this accommodation would be best adequate by filing, afore a assiduity account would contrarily be appropriate to be filed (with the assiduity account to be filed up to six months above-mentioned to Sept. 1, 2018), a Costs Account Alteration and a Costs Account Alteration Additional Affair anatomy absorption each of Jim’s three names independent in the three official documents. Retaining the name Jim Spaulding on the costs account would acceptable be accidental because nicknames are about never acceptable or effective. The alone barring would be if the alone managed to get his or her appellation acclimated on his or her driver’s authorization (or government-issued identification card) as was the case in this illustration.
Note, though, that the driver’s-license-or-identification-card claim does not administer to alone debtor names independent in Indiana mortgages that are to serve as accoutrement filings or as costs statements accoutrement as-extracted accessory or balk to be cut. For these recordings, either the debtor’s alone name or surname and aboriginal claimed name is sufficient.
Prior to July 1, 2013, Indiana’s Commodity 9 automatically accustomed accomplishment of a aegis absorption for up to four months afterwards the debtor’s change in filing jurisdiction, but alone with account to accessory in which the aegis absorption had attached and was able at the time the debtor afflicted filing jurisdictions. Adapted Commodity 9 now additionally automatically recognizes the accomplishment of a aegis absorption in accessory acquired up to four months afterwards the change in filing jurisdiction. The situations in which this added aegis applies include: (1) the debtor, which is a registered organization, reincorporates beneath the laws of a altered jurisdiction; (2) the debtor is an organization added than a registered alignment and moves its arch executive appointment to a altered jurisdiction; (3) the debtor is an individual and moves his or her arch abode of abode to another jurisdiction; and (4) a new debtor, amid in a different administration from the aboriginal debtor, becomes apprenticed by the aboriginal debtor’s aegis agreement. This closing situation about occurs back the aboriginal debtor merges into the new debtor; the new debtor contrarily becomes about accountable for the obligations of the aboriginal debtor and acquires or succeeds to all, or essentially all, of the assets of the aboriginal debtor; or when the new debtor contractually assumes the aboriginal debtor’s obligations beneath the aboriginal debtor’s aegis agreement. The accent of this added aegis increases area there is a able likelihood that the debtor or, as applicable, the new debtor, will be accepting abundant new accessory during the pertinent adroitness aeon declared above. The anchored party’s abortion to book a new costs account in the new filing administration aural the applicative adroitness aeon automatically after-effects in such anchored party’s aegis absorption in the after-acquired accessory not alone actuality unperfected, but also actuality accounted to never accept been able as adjoin a client of the accessory for amount (which includes a aggressive anchored party in the aforementioned collateral).
To allegorize a debtor’s change in filing administration where the debtor additionally periodically acquires abundant accessory that is to be allotment of a anchored party’s able aegis interest, accept an Indiana corporation, Jan’s Confectionery, Inc., obtains a accommodation on Aug. 1, 2013 that is anchored by all of the confectionery’s inventory. The creditor (XYZ Bank) promptly files a costs account with the Indiana Secretary of State that perfects XYZ Bank’s aegis absorption in all of the confectionery’s inventory. Jan decides to reincorporate her business beneath the aforementioned name beneath Delaware law and does so on Feb. 1, 2014. In adjustment for XYZ Bank’s aegis absorption to be able in the confectionery’s account to which XYZ Bank’s aegis absorption attaches afterwards May 31, 2014 (generally, adapter coincides with the confectionery’s accretion of the inventory), XYZ Bank will charge to book a new costs account in Delaware adjoin the confectionery’s account by May 31, 2014. If XYZ Bank does not do so, again XYZ Bank’s aegis absorption in any account acquired by the debtor afterwards May 31, 2014 will be unperfected, and XYZ Bank’s anchored absorption in that account will be accessory to any other anchored party’s able aegis absorption in such inventory.
Under adapted Indiana Commodity 9, not alone a debtor, but additionally a anchored affair of record, is accustomed to book an Information Account (formerly, a “Correction Statement”). An Admonition Account may be filed if a affair believes a financing account almanac is inaccurate or was filed by a being who was not advantaged to do so. As with the above-mentioned Correction Statement, an Admonition Account provides accessible apprehension that a filed record’s ability is in dispute, but it does not change the acknowledged aftereffect of the acknowledged record. In accession to renaming Form UCC5 an “Information Statement,” the Indiana Secretary of State’s appointment has revised added forms in befitting with the new law; namely, Indiana’s UCC Costs Account and related forms (Forms UCC1, UCC1Ad, and UCC1AP) and Indiana’s UCC Costs Account Alteration and accompanying forms (Forms UCC3, UCC3Ad, and UCC3AP). The Indiana Secretary of State’s office has additionally issued a new Admonition Request anatomy (Form UCC11). Note that costs statements no best crave admonition regarding an authoritative debtor’s (1) blazon of organization, (2) administration of organization, and (3) authoritative identification number. The accountability of accouterment this admonition did not arise to be account by the bordering account of appropriate between similarly-named debtors back there are already added checks in place.
In acknowledgment to contempo abuses of the UCC filing process, the Indiana assembly afresh added non-uniform sections 901 and 902 to Indiana’s Commodity 9, able April 24, 2013. These new accoutrement acquiesce the Indiana Secretary of State’s appointment (but not a canton recorder) to adios costs statements that the Secretary of State’s appointment determines are not appropriate or accustomed to be filed with the Secretary of State, or that the appointment has reasonable account to accept are materially apocryphal or fraudulent. Counterfeit costs statements accommodate statements (1) in which the aforementioned name is listed as both the anchored affair and the debtor, 2) in which an alone debtor is appointed as a transmitting utility, (3) that arise to be submitted for an abnormal purpose or are forged, or (4) that are submitted without (i) the accord or accord of the being called as the obligor, the debtor, and the buyer of the collateral, or (ii) the accord of the anchored party. This new law additionally provides for administrative analysis if a being believes that a filed financing account is fraudulent. If a costs account is bent to be fraudulent, a cloister may acknowledge it abortive and adjustment it concluded or purged by the appointment or bureau that has control of the costs statement. A accompanying accouterment that additionally became able on April 24, 2013 prohibits an Indiana canton recorder (but not the Indiana Secretary of State’s office) from recording an apparatus attenuated by, or that appears to be attenuated by, claret or addition actual fluid.
The new law does not crave anchored parties to booty any actual action. Costs statements in which the new law affects the name of the debtor but does not affect the filing jurisdiction abide able until the accustomed blooper date if filed in Indiana, or until the beforehand of the accustomed blooper date or June 30, 2018 if filed in addition jurisdiction. However, if a costs account is advised to absolute a aegis absorption in after-acquired accessory (and there is no change in the filing jurisdiction), again an alteration to the aboriginal costs account should be filed that corrects the debtor’s name afore the beforehand of the accustomed blooper date for the costs account or Nov. 1, 2013. Otherwise, any accessory acquired afterwards the end of the four-month aeon (or beforehand blooper date), but afore the filing of the amendment, will be perfected, but with a accomplishment date that is the date the alteration was filed. Similarly, if there is a change in filing administration (which should administer rarely and alone to a debtor that is (1) a business trust, (2) created by legislation, or (3) created by a government charter, and the debtor is now advised a “registered organization” based on the filing of a “public amoebic record” in a accompaniment different from area the aboriginal costs account was filed), again an in-lieu costs account should be filed in the new jurisdiction afore the beforehand of the accustomed blooper date for the financing account or Nov. 1, 2013.
As of this writing, about all states accept either introduced legislation or adopted some anatomy of the recommended amendments. However, not all of the states that accept anesthetized legislation are afterward the Uniform Law Commission and American Law Institute’s proposed able date of July 1, 2013. Regardless, anchored parties can assure themselves by requiring alone debtors to accede to accommodate adapted admonition should their name change on their driver’s authorization or identification card, if the agenda or authorization at affair expires and is not renewed, or if they change their accompaniment of residence. For debtors that are not registered organizations beneath Commodity 9 above-mentioned to July 1, 2013, but become registered organizations afterwards July 1, a anchored party may ambition to book or chase in any accompaniment in which the debtor is amid beneath accepted Commodity 9 and area it would be deemed amid already the July 1, 2013 amendments booty effect. Afterwards July 1, 2013, there is a bound window of four months (or beneath if the accustomed blooper date of the aboriginal costs account precedes the end of the four-month window) to book a new costs statement, if required, so filings should be fabricated in the new administration against the applicative debtor as anon as possible.
The agreeable of this commodity is advised to accommodate a general adviser to the accountable matter. Specialist admonition should be sought about your specific circumstances.
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