Debtor names: 10 useful hints

Section 9-503 of the UCC provides direction for determining when a financing statement sufficiently provides the name of a debtor. If you’ve read our “UCC Article 9 amendment series”, you know that we can soon expect clarification on the issue of determining individual debtor names as the states adopt the new RA9 amendments. Until then, however, searchers and filers remain without documented guidance on determining the correct individual debtor name (or combination of names) for a particular debtor.

To help you navigate through this sometimes complicated task, we’ve provided a series of tips for determining debtor names of registered organizations and individuals, and for entering that information on a filing.

1. For registered organizations, always use the exact legal name found on the organizational documents in the jurisdiction or organization.
2. To determine the correct individual debtor name, first look to the individual’s driver license/state ID, or birth certificate. If not available, look for the name used on the individual’s passport or tax return.
3. When in doubt, don’t hesitate to file under additional names. You may feel confident you’ve used the correct document as reference, but remember, these names can change (e.g., in the event of a marriage). The cost of additional filings is nominal compared to the amount at stake in the event of an ineffective filing.
4. For individuals, always use the exact full legal name. For example, if the name is James, it is best to avoid using Jim, Jimmy, Jamie, or any derivative or nickname, even if commonly used.
5. For individuals, do not use any prefix (e.g., Dr., Mr., Mrs.) or suffix (e.g., CPA, Esquire, M.D.) with the exception of indications of lineage (e.g., Jr., Sr., III).
6. The official comments provide quite simply: If the organization has a name, that name is the correct name to put on the financing statement. If the organization doesn’t have a name, the financing statement should name the individuals or other entities that comprise the organization.
7. There is no reason to place tradenames or DBAs, FKAs, etc. anywhere on the filing.
8. NEVER list a debtor name only on an attachment of any type. Never list debtor names in the collateral field, misc. information field, or any field other than the debtor name field(s) contained on the UCC-1 and addendum page.
9. If you have multiple debtors, use additional addendum pages (even if it takes 50 addendum pages!) to list the additional debtors. The debtor names must be in the appropriate fields.
10. Many people are entering debtor names based upon the “filing office’s standard search logic”. Keep in mind that the standard search logic of a state is a method by which UCC searching is conducted. The filing rules require the exact legal name to be used when filing. If the standard search logic changes in the future, you will always be protected if you follow the filing rules (which require exact legal name) rather than searching rules (which allow for slight name variations in some cases).