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Legalinfomd, Attorney
Category: Business Law
Satisfied Customers: 160
Experience:  Attorney with 24 years of experience in business law.
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How do I collect from UCC filing in NY against receivable of

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How do I collect from UCC filing in NY against receivable of a Borrower?

Hello and thank you for your question. This did not involve a negotiable instrument?

Customer: replied 3 years ago.

this was part of a loan to a business

Is this a real estate law question?
Customer: replied 3 years ago.

not really


borrower is in default of a loan collaterilzed by UCC-1 on the company's receivables. we found out who the large receivables are from. we have general UCC-1 on it. how do we collect from the receivable firm so that they do not pay our borrower but pay us the lender directly since the borrower is in default?

Let me switch your question to our business law section. Thank you.

If you have security interest in accounts receivable pursuant to a written agreement (i.e. a security agreement), and you have perfected the security interest by filing a UCC-1 financing statement, the first step would be for you to send a notice of default to the borrower and demand payment of the amount due within 10 days. If payment is not made, you may proceed to collect accounts receivable of the debtor in accordance with the terms of the security agreement. You do not need to to obtain an order of court. You must follow the provisions set forth in your security agreement. Please note that if you do not have a security agreement, but only a UCC-1 financing statement, then you do not have a perfected security interest and cannot collect on the collateral. You must have both a security agreement and a UCC-1 financing statement.

 

Depending on the terms of your security agreement, you would most likely send a letter to the account receivable payor notifying them that you have a perfected security interest in the accounts receivable of the debtor, and that all payments are to be made to you, and not to the debtor, until further notice. Enclose with your letter a copy of the security agreement and the UCC-1 financing statement. If and when you receive payment of the entire debt plus any costs incurred collecting, you would notify the account receivable payor to recommence paying the debtor.

 

After you receive payments, you must send an accounting to the debtor of all amounts received, credited to the debt plus costs, and the balance remaining due. If you receive more than the amount owed, you must remit any surplus to the debtor.

 

 

I trust that the information provided will be useful. Best of luck with your collection.

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Thank you.
Legalinfomd, Attorney
Category: Business Law
Satisfied Customers: 160
Experience: Attorney with 24 years of experience in business law.
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