A termination statement is a legal document that serves as an amendment to a financing statement. It identifies the original financing statement by its file number and indicates that the financing statement is no longer effective. This document is crucial in the context of secured transactions, as it formally ends the secured party's interest in the collateral described in the financing statement.
Termination statements are primarily used in the area of commercial law, particularly under the Uniform Commercial Code (UCC). They are relevant when a debtor pays off a secured loan or when the secured party no longer has an interest in the collateral. Users can manage the filing of termination statements themselves with the appropriate legal templates, such as those offered by US Legal Forms, or they may seek assistance from legal professionals.
Here are a couple of examples of abatement:
Example 1: A business secures a loan with its inventory as collateral. Once the loan is paid off, the lender files a termination statement to release their claim on the inventory.
Example 2: A property owner refinances their mortgage, and the old lender files a termination statement to indicate that their interest in the property is no longer valid. (hypothetical example)
The Uniform Commercial Code (UCC) governs the use of termination statements in secured transactions. Specifically, Article 9 of the UCC outlines the requirements for filing and amending financing statements, including termination statements.
| State | Requirements for Termination Statements |
|---|---|
| California | Requires filing with the Secretary of State's office. |
| New York | Must be filed in the county where the original financing statement was filed. |
| Texas | Can be filed electronically with the Texas Secretary of State. |
This is not a complete list. State laws vary, and users should consult local rules for specific guidance.
| Term | Definition | Key Differences |
|---|---|---|
| Financing Statement | A document filed to perfect a security interest in collateral. | A financing statement establishes a security interest, while a termination statement cancels it. |
| UCC Amendment | A change to an existing financing statement. | A termination statement is a specific type of amendment that indicates the end of a security interest. |
If you need to file a termination statement, gather the necessary information, including the file number of the original financing statement. You can use legal templates from US Legal Forms to create and file your termination statement. If you're unsure about the process, consider consulting a legal professional for guidance.
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If you do not file a termination statement, the secured party may still have a claim on the collateral, which could affect your ability to sell or refinance it.