Consumer Bankruptcy Update

Materials from the Consumer Bankruptcy Update presentations held by UK/CLE in December 2000

Twenty Questions About an Individual Debtor\u27s Name Under Amended Article 9 Section 9-503(a)(4) Alternative A

This Article answers questions created by the financing statement requirements for sufficiency of the name of an individual debtor under the amendments to Uniform Commercial Code Article 9—Secured Transactions. An individual debtor in a security interest transaction could be known by various names: birth certificate name, driver’s license name, passport name, or nickname. Revised Article 9 provides no guidance on what name is the correct name of the debtor for entry on the financing statement, and a financing statement that does not provide the correct name of the debtor does not perfect the security interest. To resolve this problem, the Joint Review Committee for Article 9 considered possible amendments to the individual debtor name requirements. Even the Joint Review Committee struggled with the issue, finally adopting two alternatives for sufficiency of the name of an individual debtor and asking states to choose between them. The Uniform Law Commission and the American Law Institute accepted the proposal and have offered the alternatives to the states, along with other amendments to Article 9. The proposed effective date of the amendments to Article 9 is July 1, 2013. To date, most states have adopted Alternative A to section 9-503(a)(4) of amended Article 9. It is known as the “only if” rule. In accordance with this rule, a financing statement is sufficient only if it provides the name of the individual debtor as indicated on the debtor’s unexpired driver’s license. However, a secured party complying with section 9-503(a)(4) Alternative A could still face many questions regarding the debtor’s name. This Article asks and answers twenty such questions. The Article also examines the statutory requirements of section 9-503(a)(4) Alternative A and how a filed financing statement that does not satisfy those requirements could nevertheless remain effective