The UCC-1 form is a creation of the Uniform Commercial Code and functions much like a lien or mortgage against real estate does except it it filed and recorded against personal (usually business related) property.
If, for example you were to loan some money to a resturanteur and you wished to take a security interest in his equipment you would file a UCC-1 against the equipment. Should the resturanteur fail to make his payments you could file suit, get a judgement and take possession of the equipment. If he were to file for bankruptcy you would be a secured creditor and the other creditors could not claim the equipment as a general asset of the business to be liquidated to pay them. You would get paid first.
The UCC-1 form is a creation of the Uniform Commercial Code and functions much like a lien or mortgage against real estate does except it it filed and recorded against personal (usually business related) property.
If, for example you were to loan some money to a resturanteur and you wished to take a security interest in his equipment you would file a UCC-1 against the equipment. Should the resturanteur fail to make his payments you could file suit, get a judgement and take possession of the equipment. If he were to file for bankruptcy you would be a secured creditor and the other creditors could not claim the equipment as a general asset of the business to be liquidated to pay them. You would get paid first.
It can also be taken as a multiple asset lien as the equipment example above along with encumbering real estate.
To learn more go to your state page at: http://www.sos.state.tx.us/ucc/index.shtml
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