1) How long is a financing statement effective? How can it be extended? 2) What

Question

1) How long is a financing statement effective? How can it be extended?

2) What is the creditor's obligation realted to a filed financing statement once the debt is paid off by the debtor?

3) Upon debtor's default what rights does the creditor have to the collateral?

4) If upon repossesiion and resale the creditor gets an amount IN EXCESS of the debt can the creditor keep it?

5) If upon repossession and resale the creditor gets an amount LESS that the outstanding debt does the creditor have any further legal rights against the debtor?

Thanks!

Explanation / Answer

1) FS is effective for a period of 5 years. Except initial financing statement filed in connection with a public-finance transaction or manufactured-home transaction is effective for 30 years. it can be extended by filing a revised financial statement at a subsequent period.

2) upon settlement of the debt the creditor has no obligations agains the debtor and the financial statement.

3) the Rights on collateral depends on the contractual agreement and the terms of the debts between the debtor and the creditor.

4) No the creditor has to return the excess amount to the debtor on satisfaction of his/her claim.

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