An Illinois UCC (Uniform Commercial Code), also known as a UCC-1 Financing Statement, is a lien filed by a creditor to protect their interest when making a loan. This lien exists until the debt is paid for and can be placed on any personal property such as vehicles, equipment and more. A UCC filing does not apply for real estate. UCC filings protect lenders should the borrower stop paying on the debt or declare bankruptcy. The UCC provides documentation for the lender and allows the ability to foreclose or force the sale of the property to pay back the debt.
UCC filings are public record and in Illinois, the Secretary of State has an online UCC database. This database includes both the state UCC and Federal Tax Lien index. Since some UCC images contain personal information such as social security numbers, federal identification numbers and bank account numbers, images of the UCC documents are only available by completing a UCC-11 information request.
The ability to do a UCC search is important because if multiple creditors have a lien on the same property and the debtor fail to pay, those creditors would be looking at a loss as the collateral would likely not have enough value to satisfy the debts.
How does the UCC filing process work?
Once approved for secured financing, a creditor files a UCC-1 Financing Statement with the Illinois Secretary of State which creates a lien against the collateral.
The Illinois UCC Financing Statement contains:
- The borrower’s name and address
- The lender’s name and address
- Information about the collateral.
All UCC filings in Illinois will go through the Secretary of State’s office except for collateral that is timber to be cut or extracted minerals. These filings are done through the county recorder’s office in the county where the collateral is located.
UCC filings are active in Illinois for 5 years from the date of filing in most cases. Filings are renewable for long-term debts and filings can be amended to update lender’s position of the secured collateral.
How much does an Illinois UCC search cost?
A UCC-1 Financing Statement search is free if a simple search is done. If you want an image of the statement, the cost is $20.
How to search for a UCC filing in Illinois
- Visit- http://www.cyberdriveillinois.com/departments/business_services/uniform_commercial_code/home.html
- Click on UCC/Federal Tax Lien Database Search
- Click on UCC Search, then select by the way you want to search either by the debtor’s personal name, business name, a keyword or file number.
- In this example, we will search by the debtor’s last name. Here we used Smith as the last name. The last name is required but to narrow the search, you can enter their first or middle name.
- These are a sample of the results from the last name of Smith in the Illinois Secretary of State’s UCC database.