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A UCC-1 financing statement is a legal formthat a creditor files to give notice that it has or may have an interest in the personalproperty of a debtor This form is filed in order to perfect acreditor's security interest by giving public notice that there is a right to take possessionof and sell certain assets for repayment of a specific debt with a certain priority Such notices of sale are often found in thelocal newspapers Once the form has been filed the creditorestablishes a relative priority with other creditors of the debtor This process is also called perfecting thesecurity interest in the property and this type of loan is a secured loan A financing statement may also be filed inthe real estate records by a lessor of fixtures to establish the priority of the lessor'srights against a holder of a mortgage or other lien on the real property The creditor's rights against the debtor andthe lessor's rights against the lessee are based on the credit documents and the leaserespectively and not the financing statement Pursuant to the standards set forth in theUCC the financing statement need only contain three pieces of informationthe debtor's name and address the creditor's name and addressan indication of the collateral which may be very generalThe financing statement is generally filed with the office of the state secretary ofstate in the state where the debtor is located - for an individual the state where the debtorresides for most kinds of business organizations the state of incorporation or organization Many states have a state agency that operatesunder the secretary of state which is tasked with overseeing business organizations andactivities including receipt of financing statements However an exception exists if the collateralis something that is tied to a particular piece of real property such as timber mineralrights or fixtures In that case the filing must be made in thecounty where the property is located usually in the recording office or county court becausethat is where third parties are most likely to search for such record In the case of a loan secured by personalproperty collateral the filing of a financing statement gives notice of a lien against theproperty so that other lenders or buyers of the personal property will know of the securityinterest In the case of a filing of a financing statementby a lessor of fixtures the filing of the financing statement gives notice of the lessor'sinterests to others who acquire an interest in the real property and related fixtures The financing statement does not create alien nor does it create any additional rights against a lessee in favor of a lessor thefiling of a financing statement just gives notice of whatever rights the creditor orlessor have under their loan documents or lease respectively References