The Expert Podcast

So how do you search for assets within UCC filings? One of the most often overlooked sources of assets and asset searching is UCC filings. And what is the UCC? For some of you they already know this - you can fast forward about 20 seconds. A UCC stands for Universal Commercial Code. It's actually a federal guideline, a regulatory guideline to record financing on materials that are not real estate. For example, when you get a mortgage on real estate, that's filed as a mortgage and it's a specific type of financing. If you're lending money on some other type of an asset that's not real estate, it's done using a UCC facility, and every state has a location where these filings are done. It could be the Secretary of State, maybe the county, but these filings are public.
So here is an example of what a filing looks like. It'll have the name of the creditor who is the person that's filing - in this case John Doe - phone number, and it'll have usually other contact information and their physical address. This is an example from Idaho, but the form and the format is essentially the same in all states because UCC is universal - is what the letter U stands for. It's universal from all states. There's a few changes in the order, in the format, but the information is going to be the same.
Then you have the debtor. Who is the debtor? This is the person who you're looking for their assets. Has their contact information, and sometimes when you find one of these filed against your debtor - somebody owes you money - you may find additional information about their location. Sometimes it's an older address that you may not be aware of, sometimes it's something newer. Their tax ID number is also filed. Sometimes it's redacted like in this case, but if it's redacted you can file a notice to have that released to you.
Then it'll have the financing statement. What is the collateral? In this case it's furniture, electronics, floor coverings, household fixtures. This is a generic example obviously with the name John Doe - they just put some random types of assets. But for many of these filings, especially for corporations, you're also going to find very specific inventory itemization. Sometimes serial numbers of large equipment, sometimes you find a year in a model of some construction equipment payloaders, sometimes it'll be fixed manufacturing equipment like a lathe in a company, sometimes it'll also be computer equipment or high-end restaurant equipment.
A UCC does not have to be filed against a corporation. There also could be individuals. If you rent a home with furnishings, you rent a high-end furnished homes, sometimes the landlord will file a UCC protecting their rented or leased or financed merchandise in the house. So no matter what your position is as a creditor, you want to look for UCCs in addition to the other searches. You know you're going to search for bank accounts, real estate, vehicles - those are all separate searches. You do not want to overlook a UCC filing search.
In addition, you also want to look to see if your debtor is listed as a secured party, right? If your debtor is not a debtor on a UCC but they're a creditor, well now you have another asset. This financing is now an asset to this secured party. So if you find that your debtor is owed money from somebody else, you may be able to subrogate the payment of that debt or take over that debt from the third party and accelerate the debt. So don't overlook UCCs.
And of course this is an electronic version. Electronic versions may have fewer extra data points that could help you. You know it'll have their email address and maybe an attorney's name. If it's done on paper, which a lot of them are, you may find on that paper there's little notes written in the margins. Maybe there's a phone number or a fax number at the top, maybe there's the name of a contact person. So look at the actual document. Don't just look at the electronic online database version because you could find on the paper document some extra info that can help you find more assets.
Also when you find this UCC filing, whatever the filing number is - and I don't know if this particular one has a filing number - but search for the filing numbers on either side of it. So finally, if the filing number is one two three four, look for filing number one two three three and one two three five. Because many times the creditor or the debtor will have multiple UCCs and they'll file them simultaneously. When you deliver them to the county, the county is gonna record them in the order they received, or the state. So you may find some interesting information by looking at adjacent UCCs.
You may also find additional names. For example, secured party - if you look at this address and you do a reverse search on that address, who owns that property, who's listed in the corporate records at that property, you may find other potential debtors, maybe even third parties that can assist you with that. Worst case scenario, if this debtor owes you money and secured party is a creditor, you may be able to contact them and say, "Look, do you have a credit application for this person? Did they give you a financial statement? Did they give you a balance sheet with all their assets?" Because when you're doing an asset search, instead of having to do your own legwork, maybe just get a copy from their existing creditor because they have that. The debtor had to voluntarily give financial statements and balance sheets to their current creditor.
If they won't give it to you voluntarily, have the court give you subpoena to get that information from this secured party. Again, we're not attorneys, we're not giving you legal advice. You want to get good legal advice from a qualified attorney. But these are the kind of things that you can do with an investigation or in a court case to get information about potential that can satisfy a loan, a debt, a judgment. Maybe it's an embezzlement case and you're trying to collect money to recover your losses. Maybe you have an insurance claim that you're trying to subrogate against for losses. Many types of debts can be pursued using UCCs.
Again, this is just one tool in the toolbox. There are at least a dozen types of assets like we said - vehicles, real estate, bank accounts, crypto, corporate assets, intangible assets, intellectual property. There's many different kinds. UCC is just one of them, but don't overlook it because you can find not only direct listing of assets here. This financing statement covers the following collateral - boom, have a list. You may find references to other assets by searching the form directly and also addresses, phone numbers, emails that are contained on this UCC.
Don't overlook it. It's something that very rarely clients will come up with the idea by themself. It's usually something we add to the client's asset search profile and matrix, and very often it comes up with some good stuff that'll help you get recovery of whatever debt is owed to you.