Ucc Liens and Ucc Judgment Liens
I am a Judgment Broker, not a lawyer, and this article is my opinion, please see a lawyer if you need legal advice.
Ucc Liens and Ucc Judgment Liens
A Ucc (Uniform industrial Code) lien, either is a general or a exact lien on most enterprise property, and unavoidable kinds of personal property. This lien does not cover real estate property. (Real estate requires a separate kind of lien, such as an abstract of judgment, recorded at the county recorder where the asset is located.)
A Ucc lien can be voluntary, for example, as a condition to getting something financed, or as condition to fulfilling a enterprise contract or obligation.
Ucc liens can also be involuntary, for example, when a judgment owner records a lien against both most enterprise property, and some types of the debtor's personal property.
This lien covers enterprise property, but it also covers some kinds of personal property, and may also have some "long shot" advantages.
In California, the Ucc lien is called a Jl-1, and Ccp 697.510-697.670 specifies the types of personal asset liened as:
1) Accounts Receivable (If you can prove what someone owes the debtor.)
2) Chattel Paper (Legal papers proving secured ownership of something.)
3) tool (Excluding vehicles and vessels registered with the Dmv, and mobile homed or industrial coach registered under condition and security Code.)
4) Farm Products.
5) list (Durable goods held for sale by sell merchant with unit value greater than 0 or other list that is not held by a sell merchant for sale.)
6) Negotiable Documents of Title (Any written instrument, such as a bill of lading, a warehouse receipt, or an order for the delivery of goods.)
If your debtor owns or is a business, all the time article a Ucc lien. If you know the enterprise assets of the debtor, write them down on the lien. You may get paid when the enterprise is sold or financed. If your debtor is rich and owns an aircraft, register the lien with the Faa in Omaha, and for large boats, register the lien with the Coast Guard.
Most debtors do not own a business, and most do not have much of the kind of personal asset that Ucc liens cover. However, there are some reasons to consider recording this lien on an average (non-business) judgment debtor:
1) The Ucc lien is very easy and cheap, and it costs just and one stamp in California. Recording a Ucc lien might annoy, notice, or intimidate some debtors.
2) The lien might get the attentiveness of a lender when the debtor tries to get financing or borrow money.
3) Most Ucc liens last five years (they can regularly be extended within six months of expiration) and recording one might give you a secured status if the debtor files for bankruptcy (and has assets).
Like most other liens in bankruptcy court, a Ucc lien is only a piece of paper unless you can identify and locate exact asset encumbered by the lien. (This is why you should write down any known assets of the debtor on the lien.)
Ucc liens are obtained from a Secretary Of State (Sos), and each state's Sos is different. It's a good idea to look up and read the laws of your state about personal asset liens. Then find your state's Sos office. A good guide to all Sos offices can be found at http://www.coordinatedlegal.com/SecretaryOfState.html
Usually, a court-scheduled debtor exam (called an Order for exam - Oex, or a Judgment Debtor exam - Jdx) lien, when personally served on the debtor, is a far great lien on personal property.
Oex/Jdx liens are more thorough and contribute great security as they apply to all non-exempt asset of the debtor. Most Oex/Jdx liens are only good for one year, but they can be extended with a motion filed before their expiration for good cause. (Or, you can serve the debtor every year with a new Oex/Jdx, renewing the lien.
4) If your judgment debtor is lucky enough to win even 0 in the lottery, the Lottery Commission will look at all Ucc liens, to decide if the winner owes money. If they do, they will pay the creditors in full before they pay the judgment debtor a particular penny.
To article this lien, get the form from the Secretary Of State where your debtor has or may have assets. Perfect the form, filling out all the information required, e.g., name of debtor, number of judgment, etc. Mail it with a check, often . When you get the form back, mail a copy of it to the debtor. There is no need to article a Ucc lien at the County Recorder.
Existing Ucc liens can be used to find clues to debtor's assets. Ucc do not regularly show bank accounts, unless a bank has a lien for a loan for equipment. Sometimes enterprise debtors will have a bank lien because the debtor took a loan with the bank.
Usually, a Ucc lien is not a direct way to get money from the debtor. For example, one would article liens, together with the Ucc, to lien the debtor's computer equipment. To no ifs ands or buts collect, you may have to find out who the enterprise does work for, and get an assignment order for their customers to pay you, instead of the debtor.
When the judgment debt is satisfied, make sure to release the lien, and mail a copy of the Ucc lien release to the debtor.
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