In a cross-motion for summary judgment filed in the U. Bankruptcy Court for the Southern District of New York, U. Bank called the unsecured creditors' complaint a last-ditch effort by parties that “have little hope to recover on their unsecured claims.”“Thus, they commenced this action in an...Law360, New York (September 1, 2011, PM EDT) -- In a recent decision involving Terre Star Networks Inc. The question of whether a secured lender can obtain a valid lien on...To secure the loan, the borrower signs a promissory note in favor of the lender and a security agreement granting a security interest in its inventory.However, the lender fails to file a UCC financing statement with the secretary of state's office to perfect its security interest in the inventory.In many cases over the years, creditors thought their security interests were fully perfected, only to find they failed to take the necessary steps before the borrower filed for bankruptcy.For a lender, timely and proper perfection is imperative.
This doesn't mean you have to pay the whole amount: if you can work out a deal, for example, to offer 75 or 50 percent of what you owe, the lienholder may agree.
In bankruptcy a trustee or debtor-in-possession can avoid an unperfected lien, leaving the creditor's claim unsecured.
Section 544(a)(1) provides that, after the bankruptcy filing, a trustee can avoid any transfer made or obligation incurred by the debtor that would be voidable by a judgment lien creditor under nonbankruptcy law.
The procedure for perfecting a lien may differ from state to state and depends on the type of property. 2007) (financing statement seriously misleading where creditor failed to provide debtor's correct legal name, identifying debtor as John Bean Farms, Inc. Second, be sure the security agreement grants a security interest in everything covered by your financing statement. Failure to include in the financing statement all collateral listed in the security agreement could limit your security interest.
Common examples of perfected security interests are car titles signed with the lienholder's name and home mortgages recorded in the county where the property is located. Listing collateral that is not included also will invalidate it.