How to File a Personal Property Lien
A personal property lien is created when you acquire rights in the property of another. This will typically occur when you need to secure someone's promise to repay a loan or make regular installment payments as part of the sale of business. There is no legal requirement to file any document to create the lien; however, filing the appropriate document--called a UCC-1 Financing Statement--will give added protection to your lien. The UCC-1 is a short, simple form filed with the appropriate state or county filing office.
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Instructions
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Contact the Secretary of State's office of the debtor's residence to determine if that office accepts UCC-1 Financing Statements. Most states require the UCC-1 to be filed there. However, a few states may require the UCC-1 to be filed in the county recorder's office where the debtor resides and in any other county where the personal property subject of your lien may be located.
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Download the appropriate form of the UCC-1 required by the filing office where the debtor resides or personal property is located. There is an easy-to-find version of the UCC-1 identified as the "National UCC Financing" that will most likely be accepted by any filing office; however, some offices use modified UCC-1s and it is good practice to use the modified form to ensure your lien has the full benefits of filing.
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Follow the instructions accompany the UCC-1 you downloaded for completing the form. Give special attention to correctly identifying the debtor's information--particularly name spellings and alternate names--and to identifying the personal property subject to your lien.
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Follow the filing instructions provided by the filing office. You will probably have the option of filing the UCC-1 in person or by mail. A few offices may even permit online filings. Regardless of the method used make sure to obtain a file-stamped copy of your UCC-1 or some other confirmation that indicates the filing date and number. A filing fee will also be required.
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Verify the length of time your UCC-1 is valid. Most state laws provide for the expiration of a UCC-1 five years from the date of filing. However, if you need to extend the validity of your UCC-1 beyond the expiration date, you can extend the period--usually for another five years--by making an additional filing before the UCC-1 expires. Contact the filing office for the appropriate form.
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Tips & Warnings
The International Association of Commercial Administrators maintains a website that has the contact information for UCC-1 filing offices throughout the United States and parts of Canada.
If the debtor has given additional liens for the same property, you may be at a disadvantage enforcing your lien if you do not file a UCC-1 and the other creditors filed their UCC-1s.
If you need to extend the expiration date of your UCC-1, check the filing requirements at least a year before the expiration date as some states may only accept extensions filed at least six months before the expiration date.
