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IC 26-1-9.1-102 Version a
Definitions and index of definitions
Note: This version of section effective until 7-1-2013. See also
following version of this section, effective 7-1-2013.
Sec. 102. (a) In IC 26-1-9.1:
(1) "Accession" means goods that are physically united with
other goods in such a manner that the identity of the original
goods is not lost.
(2) "Account", except as used in "account for", means a right to
payment of a monetary obligation, whether or not earned by
performance:
(A) for property that has been or is to be sold, leased,
licensed, assigned, or otherwise disposed of;
(B) for services rendered or to be rendered;
(C) for a policy of insurance issued or to be issued;
(D) for a secondary obligation incurred or to be incurred;
(E) for energy provided or to be provided;
(F) for the use or hire of a vessel under a charter or other
contract;
(G) arising out of the use of a credit or charge card or
information contained on or for use with the card; or
(H) as winnings in a lottery or other game of chance
operated or sponsored by a state other than Indiana, a
governmental unit of a state, or a person licensed or
authorized to operate the game by a state or governmental
unit of a state.
The term does not include a right to a payment of a prize
awarded by the state lottery commission in the Indiana state
lottery established under IC 4-30. The term includes
health-care-insurance receivables. The term does not include (i)
rights to payment evidenced by chattel paper or an instrument,
(ii) commercial tort claims, (iii) deposit accounts, (iv)
investment property, (v) letter-of-credit rights or letters of
credit, or (vi) rights to payment for money or funds advanced or
sold, other than rights arising out of the use of a credit or charge
card or information contained on or for use with the card.
(3) "Account debtor" means a person obligated on an account,
chattel paper, or general intangible. The term does not include
persons obligated to pay a negotiable instrument, even if the
instrument constitutes part of chattel paper.
(4) "Accounting", except as used in "accounting for", means a
record:
(A) authenticated by a secured party;
(B) indicating the aggregate unpaid secured obligations as of
a date not more than thirty-five (35) days earlier or
thirty-five (35) days later than the date of the record; and
(C) identifying the components of the obligations in
reasonable detail.
(5) "Agricultural lien" means an interest, other than a security
interest, in farm products:
(A) that secures payment or performance of an obligation
for:
(i) goods or services furnished in connection with a
debtor's farming operation; or
(ii) rent on real property leased by a debtor in connection
with the debtor's farming operation;
(B) that is created by statute in favor of a person that:
(i) in the ordinary course of its business furnished goods
or services to a debtor in connection with the debtor's
farming operation; or
(ii) leased real property to a debtor in connection with the
debtor's farming operation; and
(C) whose effectiveness does not depend on the person's
possession of the personal property.
(6) "As-extracted collateral" means:
(A) oil, gas, or other minerals that are subject to a security
interest that:
(i) is created by a debtor having an interest in the minerals
before extraction; and
(ii) attaches to the minerals as extracted; or
(B) accounts arising out of the sale at the wellhead or
minehead of oil, gas, or other minerals in which the debtor
had an interest before extraction.
(7) "Authenticate" means:
(A) to sign; or
(B) to execute or otherwise adopt a symbol, or encrypt or
similarly process a record in whole or in part, with the
present intent of the authenticating person to identify the
person and adopt or accept a record.
(8) "Bank" means an organization that is engaged in the
business of banking. The term includes savings banks, savings
and loan associations, credit unions, and trust companies.
(9) "Cash proceeds" means proceeds that are money, checks,
deposit accounts, or the like.
(10) "Certificate of title" means a certificate of title with respect
to which a statute provides for the security interest in question
to be indicated on the certificate as a condition or result of the
security interest's obtaining priority over the rights of a lien
creditor with respect to the collateral.
(11) "Chattel paper" means a record or records that evidence
both a monetary obligation and a security interest in specific
goods, a security interest in specific goods and software used in
the goods, a security interest in specific goods and license of
software used in the goods, a lease of specific goods, or a lease
of specific goods and license of software used in the goods. In
this subdivision, "monetary obligation" means a monetary
obligation secured by the goods or owed under a lease of the
goods and includes a monetary obligation with respect to
software used in the goods. The term "chattel paper" does not
include: (i) charters or other contracts involving the use or hire
of a vessel; or (ii) records that evidence a right to payment
arising out of the use of a credit or charge card or information
contained on or for use with the card. If a transaction is
evidenced by records that include an instrument or series of
instruments, the group of records taken together constitutes
chattel paper.
(12) "Collateral" means the property subject to a security
interest or agricultural lien. The term includes:
(A) proceeds to which a security interest attaches;
(B) accounts, chattel paper, payment intangibles, and
promissory notes that have been sold; and
(C) goods that are the subject of a consignment.
(13) "Commercial tort claim" means a claim arising in tort with
respect to which:
(A) the claimant is an organization; or
(B) the claimant is an individual and the claim:
(i) arose in the course of the claimant's business or
profession; and
(ii) does not include damages arising out of personal injury
to or the death of an individual.
(14) "Commodity account" means an account maintained by a
commodity intermediary in which a commodity contract is
carried for a commodity customer.
(15) "Commodity contract" means a commodity futures
contract, an option on a commodity futures contract, a
commodity option, or another contract if the contract or option
is:
(A) traded on or subject to the rules of a board of trade that
has been designated as a contract market for such a contract
pursuant to federal commodities laws; or
(B) traded on a foreign commodity board of trade, exchange,
or market, and is carried on the books of a commodity
intermediary for a commodity customer.
(16) "Commodity customer" means a person for which a
commodity intermediary carries a commodity contract on its
books.
(17) "Commodity intermediary" means a person that:
(A) is registered as a futures commission merchant under
federal commodities law; or
(B) in the ordinary course of its business provides clearance
or settlement services for a board of trade that has been
designated as a contract market pursuant to federal
commodities law.
(18) "Communicate" means:
(A) to send a written or other tangible record;
(B) to transmit a record by any means agreed upon by the
persons sending and receiving the record; or
(C) in the case of transmission of a record to or by a filing
office, to transmit a record by any means prescribed by
filing-office rule.
(19) "Consignee" means a merchant to which goods are
delivered in a consignment.
(20) "Consignment" means a transaction, regardless of its form,
in which a person delivers goods to a merchant for the purpose
of sale and:
(A) the merchant:
(i) deals in goods of that kind under a name other than the
name of the person making delivery;
(ii) is not an auctioneer; and
(iii) is not generally known by its creditors to be
substantially engaged in selling the goods of others;
(B) with respect to each delivery, the aggregate value of the
goods is one thousand dollars ($1,000) or more at the time
of delivery;
(C) the goods are not consumer goods immediately before
delivery; and
(D) the transaction does not create a security interest that
secures an obligation.
(21) "Consignor" means a person that delivers goods to a
consignee in a consignment.
(22) "Consumer debtor" means a debtor in a consumer
transaction.
(23) "Consumer goods" means goods that are used or bought for
use primarily for personal, family, or household purposes.
(24) "Consumer-goods transaction" means a consumer
transaction in which:
(A) an individual incurs an obligation primarily for personal,
family, or household purposes; and
(B) a security interest in consumer goods secures the
obligation.
(25) "Consumer obligor" means an obligor who is an individual
and who incurred the obligation as part of a transaction entered
into primarily for personal, family, or household purposes.
(26) "Consumer transaction" means a transaction in which (i) an
individual incurs an obligation primarily for personal, family,
or household purposes, (ii) a security interest secures the
obligation, and (iii) the collateral is held or acquired primarily
for personal, family, or household purposes. The term includes
consumer-goods transactions.
(27) "Continuation statement" means an amendment of a
financing statement that:
covering goods that are or are to become fixtures and satisfying
IC 26-1-9.1-502(a) and IC 26-1-9.1-502(b). The term includes
the filing of a financing statement covering goods of a
transmitting utility which are or are to become fixtures.
(41) "Fixtures" means goods that have become so related to
particular real property that an interest in them arises under real
property law.
(42) "General intangible" means any personal property,
including things in action, other than accounts, chattel paper,
commercial tort claims, deposit accounts, documents, goods,
instruments, investment property, letter-of-credit rights, letters
of credit, money, and oil, gas, or other minerals before
extraction. The term includes payment intangibles and software.
(43) "Good faith" means honesty in fact and the observance of
reasonable commercial standards of fair dealing.
(44) "Goods" means all things that are movable when a security
interest attaches. The term includes (i) fixtures, (ii) standing
timber that is to be cut and removed under a conveyance or
contract for sale, (iii) the unborn young of animals, (iv) crops
grown, growing, or to be grown, even if the crops are produced
on trees, vines, or bushes, and (v) manufactured homes. The
term also includes a computer program embedded in goods and
any supporting information provided in connection with a
transaction relating to the program if (i) the program is
associated with the goods in such a manner that it customarily
is considered part of the goods, or (ii) by becoming the owner
of the goods, a person acquires a right to use the program in
connection with the goods. The term does not include a
computer program embedded in goods that consist solely of the
medium in which the program is embedded. The term also does
not include accounts, chattel paper, commercial tort claims,
deposit accounts, documents, general intangibles, instruments,
investment property, letter-of-credit rights, letters of credit,
money, or oil, gas, or other minerals before extraction.
(45) "Governmental unit" means a subdivision, agency,
department, county, parish, municipality, or other unit of the
government of the United States, a state, or a foreign country.
The term includes an organization having a separate corporate
existence if the organization is eligible to issue debt on which
interest is exempt from income taxation under the laws of the
United States.
(46) "Health-care-insurance receivable" means an interest in or
claim under a policy of insurance that is a right to payment of
a monetary obligation for health-care goods or services
provided.
(47) "Instrument" means a negotiable instrument or any other
writing that evidences a right to the payment of a monetary
obligation, is not itself a security agreement or lease, and is of
a type that in the ordinary course of business is transferred by
delivery with any necessary endorsement or assignment. The
term does not include (i) investment property, (ii) letters of
credit, or (iii) writings that evidence a right to payment arising
out of the use of a credit or charge card or information
contained on or for use with the card.
(48) "Inventory" means goods, other than farm products, that:
(A) are leased by a person as lessor;
(B) are held by a person for sale or lease or to be furnished
under a contract of service;
(C) are furnished by a person under a contract of service; or
(D) consist of raw materials, work in process, or materials
used or consumed in a business.
(49) "Investment property" means a security, whether
certificated or uncertificated, security entitlement, securities
account, commodity contract, or commodity account.
(50) "Jurisdiction of organization", with respect to a registered
organization, means the jurisdiction under whose law the
organization is organized.
(51) "Letter-of-credit right" means a right to payment or
performance under a letter of credit, whether or not the
beneficiary has demanded or is at the time entitled to demand
payment or performance. The term does not include the right of
a beneficiary to demand payment or performance under a letter
of credit.
(52) "Lien creditor" means:
(A) a creditor that has acquired a lien on the property
involved by attachment, levy, or the like;
(B) an assignee for benefit of creditors from the time of
assignment;
(C) a trustee in bankruptcy from the date of the filing of the
petition; or
(D) a receiver in equity from the time of appointment.
(53) "Manufactured home" means a structure, transportable in
one (1) or more sections, which, in the traveling mode, is eight
(8) body feet or more in width or forty (40) body feet or more
in length, or, when erected on site, is three hundred twenty
(320) or more square feet, and which is built on a permanent
chassis and designed to be used as a dwelling with or without
a permanent foundation when connected to the required
utilities, and includes the plumbing, heating, air conditioning,
and electrical systems contained therein. The term includes any
structure that meets all of the requirements of this subdivision
except the size requirements, and with respect to which the
manufacturer voluntarily files a certification required by the
United States Secretary of Housing and Urban Development
and complies with the standards established under Title 42 of
the United States Code.
(54) "Manufactured-home transaction" means a secured
transaction:
(A) that creates a purchase-money security interest in a
manufactured home, other than a manufactured home held
as inventory; or
(B) in which a manufactured home, other than a
manufactured home held as inventory, is the primary
collateral.
(55) "Mortgage" means a consensual interest in real property,
including fixtures, that secures payment or performance of an
obligation.
(56) "New debtor" means a person that becomes bound as
debtor under IC 26-1-9.1-203(d) by a security agreement
previously entered into by another person.
(57) "New value" means (i) money, (ii) money's worth in
property, services, or new credit, or (iii) release by a transferee
of an interest in property previously transferred to the
transferee. The term does not include an obligation substituted
for another obligation.
(58) "Noncash proceeds" means proceeds other than cash
proceeds.
(59) "Obligor" means a person that, with respect to an
obligation secured by a security interest in or an agricultural
lien on the collateral, (i) owes payment or other performance of
the obligation, (ii) has provided property other than the
collateral to secure payment or other performance of the
obligation, or (iii) is otherwise accountable in whole or in part
for payment or other performance of the obligation. The term
does not include issuers or nominated persons under a letter of
credit.
(60) "Original debtor", except as used in IC 26-1-9.1-310(c),
means a person that, as debtor, entered into a security
agreement to which a new debtor has become bound under
IC 26-1-9.1-203(d).
(61) "Payment intangible" means a general intangible under
which the account debtor's principal obligation is a monetary
obligation.
(62) "Person related to", with respect to an individual, means:
(A) the spouse of the individual;
(B) a brother, brother-in-law, sister, or sister-in-law of the
individual;
(C) an ancestor or lineal descendant of the individual or the
individual's spouse; or
(D) any other relative, by blood or marriage, of the
individual or the individual's spouse who shares the same
home with the individual.
(63) "Person related to", with respect to an organization, means:
(A) a person directly or indirectly controlling, controlled by,
or under common control with the organization;
(B) an officer or director of, or a person performing similar
functions with respect to, the organization;
(C) an officer or director of, or a person performing similar
functions with respect to, a person described in clause (A);
(D) the spouse of an individual described in clause (A), (B),
or (C); or
(E) an individual who is related by blood or marriage to an
individual described in clause (A), (B), (C), or (D) and
shares the same home with the individual.
(64) "Proceeds", except as used in IC 26-1-9.1-609(b), means
the following property:
(A) Whatever is acquired upon the sale, lease, license,
exchange, or other disposition of collateral.
(B) Whatever is collected on, or distributed on account of,
collateral.
(C) Rights arising out of collateral.
(D) To the extent of the value of collateral, claims arising
out of the loss, nonconformity, or interference with the use
of, defects or infringement of rights in, or damage to, the
collateral.
(E) To the extent of the value of collateral and to the extent
payable to the debtor or the secured party, insurance payable
by reason of the loss or nonconformity of, defects or
infringement of rights in, or damage to, the collateral.
(65) "Promissory note" means an instrument that evidences a
promise to pay a monetary obligation, does not evidence an
order to pay, and does not contain an acknowledgment by a
bank that the bank has received for deposit a sum of money or
funds.
(66) "Proposal" means a record authenticated by a secured party
that includes the terms on which the secured party is willing to
accept collateral in full or partial satisfaction of the obligation
it secures pursuant to IC 26-1-9.1-620, IC 26-1-9.1-621, and
IC 26-1-9.1-622.
(67) "Public-finance transaction" means a secured transaction
in connection with which:
(A) debt securities are issued;
(B) all or a portion of the securities issued have an initial
stated maturity of at least twenty (20) years; and
(C) the debtor, obligor, secured party, account debtor, or
other person obligated on collateral, assignor or assignee of
a secured obligation, or assignor or assignee of a security
interest is a state or a governmental unit of a state.
(68) "Pursuant to commitment", with respect to an advance
made or other value given by a secured party, means pursuant
to the secured party's obligation, whether or not a subsequent
event of default or other event not within the secured party's
control has relieved or may relieve the secured party from its
obligation.
(69) "Record", except as used in "for record", "of record",
"record or legal title", and "record owner", means information
that is inscribed on a tangible medium or that is stored in an
electronic or other medium and is retrievable in perceivable
form.
(70) "Registered organization" means an organization organized
solely under the law of a single state or the United States and as
to which the state or the United States must maintain a public
record showing the organization to have been organized.
(71) "Secondary obligor" means an obligor to the extent that:
(A) the obligor's obligation is secondary; or
(B) the obligor has a right of recourse with respect to an
obligation secured by collateral against the debtor, another
obligor, or property of either.
(72) "Secured party" means:
(A) a person in whose favor a security interest is created or
provided for under a security agreement, whether or not any
obligation to be secured is outstanding;
(B) a person that holds an agricultural lien;
(C) a consignor;
(D) a person to which accounts, chattel paper, payment
intangibles, or promissory notes have been sold;
(E) a trustee, indenture trustee, agent, collateral agent, or
other representative in whose favor a security interest or
agricultural lien is created or provided for; or
(F) a person that holds a security interest arising under
IC 26-1-2-401, IC 26-1-2-505, IC 26-1-2-711(3),
IC 26-1-2.1-508(5), IC 26-1-4-210, or IC 26-1-5.1-118.
(73) "Security agreement" means an agreement that creates or
provides for a security interest.
(74) "Send", in connection with a record or notification, means:
(A) to deposit in the mail, deliver for transmission, or
transmit by any other usual means of communication, with
postage or cost of transmission provided for, addressed to
any address reasonable under the circumstances; or
(B) to cause the record or notification to be received within
the time that it would have been received if properly sent
under clause (A).
(75) "Software" means a computer program and any supporting
information provided in connection with a transaction relating
to the program. The term does not include a computer program
that is included in the definition of goods.
(76) "State" means a state of the United States, the District of
Columbia, Puerto Rico, the United States Virgin Islands, or any
territory or insular possession subject to the jurisdiction of the
United States.
(77) "Supporting obligation" means a letter-of-credit right or
secondary obligation that supports the payment or performance
of an account, chattel paper, a document, a general intangible,
an instrument, or investment property.
(78) "Tangible chattel paper" means chattel paper evidenced by
a record or records consisting of information that is inscribed on
a tangible medium.
(79) "Termination statement" means an amendment of a
financing statement that:
(A) identifies, by its file number, the initial financing
statement to which it relates; and
(B) indicates either that it is a termination statement or that
the identified financing statement is no longer effective.
(80) "Transmitting utility" means a person primarily engaged in
the business of:
(A) operating a railroad, subway, street railway, or trolley
bus;
(B) transmitting communications electrically,
electromagnetically, or by light;
(C) transmitting goods by pipeline or sewer; or
(D) transmitting or producing and transmitting electricity,
steam, gas, or water.
(b) "Control" as provided in IC 26-1-7-106 and the following
definitions outside IC 26-1-9.1 apply to IC 26-1-9.1:
"Applicant" IC 26-1-5.1-102.
"Beneficiary" IC 26-1-5.1-102.
"Broker" IC 26-1-8.1-102.
"Certificated security" IC 26-1-8.1-102.
"Check" IC 26-1-3.1-104.
"Clearing corporation" IC 26-1-8.1-102.
"Contract for sale" IC 26-1-2-106.
"Customer" IC 26-1-4-104.
"Entitlement holder" IC 26-1-8.1-102.
"Financial asset" IC 26-1-8.1-102.
"Holder in due course" IC 26-1-3.1-302.
"Issuer" (with respect to a letter of credit or letter-of-credit
right) IC 26-1-5.1-102.
"Issuer" (with respect to a security) IC 26-1-8.1-201.
"Issuer" (with respect to documents of title) IC 26-1-7-102.
"Lease" IC 26-1-2.1-103.
"Lease agreement" IC 26-1-2.1-103.
"Lease contract" IC 26-1-2.1-103.
"Leasehold interest" IC 26-1-2.1-103.
"Lessee" IC 26-1-2.1-103.
"Lessee in ordinary course of business" IC 26-1-2.1-103.
"Lessor" IC 26-1-2.1-103.
"Lessor's residual interest" IC 26-1-2.1-103.
"Letter of credit" IC 26-1-5.1-102.
"Merchant" IC 26-1-2-104.
"Negotiable instrument" IC 26-1-3.1-104.
"Nominated person" IC 26-1-5.1-102.
"Note" IC 26-1-3.1-104.
"Proceeds of a letter of credit" IC 26-1-5.1-114.
"Prove" IC 26-1-3.1-103.
"Sale" IC 26-1-2-106.
"Securities account" IC 26-1-8.1-501.
"Securities intermediary" IC 26-1-8.1-102.
"Security" IC 26-1-8.1-102.
"Security certificate" IC 26-1-8.1-102.
"Security entitlement" IC 26-1-8.1-102.
IC 26-1-9.1-102 Version b
Definitions and index of definitions
Note: This version of section effective 7-1-2013. See also
preceding version of this section, effective until 7-1-2013.
Sec. 102. (a) In IC 26-1-9.1:
(1) "Accession" means goods that are physically united with
other goods in such a manner that the identity of the original
goods is not lost.
(2) "Account", except as used in "account for", means a right to
payment of a monetary obligation, whether or not earned by
performance:
(A) for property that has been or is to be sold, leased,
licensed, assigned, or otherwise disposed of;
(B) for services rendered or to be rendered;
(C) for a policy of insurance issued or to be issued;
(D) for a secondary obligation incurred or to be incurred;
(E) for energy provided or to be provided;
(F) for the use or hire of a vessel under a charter or other
contract;
(G) arising out of the use of a credit or charge card or
information contained on or for use with the card; or
(H) as winnings in a lottery or other game of chance
operated or sponsored by a state other than Indiana, a
governmental unit of a state, or a person licensed or
authorized to operate the game by a state or governmental
unit of a state.
The term does not include a right to a payment of a prize
awarded by the state lottery commission in the Indiana state
lottery established under IC 4-30. The term includes
health-care-insurance receivables. The term does not include (i)
rights to payment evidenced by chattel paper or an instrument,
(ii) commercial tort claims, (iii) deposit accounts, (iv)
investment property, (v) letter-of-credit rights or letters of
credit, or (vi) rights to payment for money or funds advanced or
sold, other than rights arising out of the use of a credit or charge
card or information contained on or for use with the card.
(3) "Account debtor" means a person obligated on an account,
chattel paper, or general intangible. The term does not include
persons obligated to pay a negotiable instrument, even if the
instrument constitutes part of chattel paper.
(4) "Accounting", except as used in "accounting for", means a
record:
(A) authenticated by a secured party;
(B) indicating the aggregate unpaid secured obligations as of
a date not more than thirty-five (35) days earlier or
thirty-five (35) days later than the date of the record; and
(C) identifying the components of the obligations in
reasonable detail.
(5) "Agricultural lien" means an interest, other than a security
interest, in farm products:
(A) that secures payment or performance of an obligation
for:
(i) goods or services furnished in connection with a
debtor's farming operation; or
(ii) rent on real property leased by a debtor in connection
with the debtor's farming operation;
(B) that is created by statute in favor of a person that:
(i) in the ordinary course of its business furnished goods
or services to a debtor in connection with the debtor's
farming operation; or
(ii) leased real property to a debtor in connection with the
debtor's farming operation; and
(C) whose effectiveness does not depend on the person's
possession of the personal property.
(6) "As-extracted collateral" means:
(A) oil, gas, or other minerals that are subject to a security
interest that:
(i) is created by a debtor having an interest in the minerals
before extraction; and
(ii) attaches to the minerals as extracted; or
(B) accounts arising out of the sale at the wellhead or
minehead of oil, gas, or other minerals in which the debtor
had an interest before extraction.
(7) "Authenticate" means:
(A) to sign; or
(B) with present intent to adopt or accept a record, to attach
to or logically associate with the record an electronic sound,
symbol, or process.
(8) "Bank" means an organization that is engaged in the
business of banking. The term includes savings banks, savings
and loan associations, credit unions, and trust companies.
(9) "Cash proceeds" means proceeds that are money, checks,
deposit accounts, or the like.
(10) "Certificate of title" means a certificate of title with respect
to which a statute provides for the security interest in question
to be indicated on the certificate as a condition or result of the
security interest's obtaining priority over the rights of a lien
creditor with respect to the collateral. The term includes another
record maintained as an alternative to a certificate of title by the
governmental unit that issues certificates of title if a statute
permits the security interest in question to be indicated on the
record as a condition or result of the security interest's obtaining
priority over the rights of a lien creditor with respect to the
collateral.
the initial financing statement.
(40) "Fixture filing" means the filing of a financing statement
covering goods that are or are to become fixtures and satisfying
IC 26-1-9.1-502(a) and IC 26-1-9.1-502(b). The term includes
the filing of a financing statement covering goods of a
transmitting utility which are or are to become fixtures.
(41) "Fixtures" means goods that have become so related to
particular real property that an interest in them arises under real
property law.
(42) "General intangible" means any personal property,
including things in action, other than accounts, chattel paper,
commercial tort claims, deposit accounts, documents, goods,
instruments, investment property, letter-of-credit rights, letters
of credit, money, and oil, gas, or other minerals before
extraction. The term includes payment intangibles and software.
(43) "Good faith" means honesty in fact and the observance of
reasonable commercial standards of fair dealing.
(44) "Goods" means all things that are movable when a security
interest attaches. The term includes (i) fixtures, (ii) standing
timber that is to be cut and removed under a conveyance or
contract for sale, (iii) the unborn young of animals, (iv) crops
grown, growing, or to be grown, even if the crops are produced
on trees, vines, or bushes, and (v) manufactured homes. The
term also includes a computer program embedded in goods and
any supporting information provided in connection with a
transaction relating to the program if (i) the program is
associated with the goods in such a manner that it customarily
is considered part of the goods, or (ii) by becoming the owner
of the goods, a person acquires a right to use the program in
connection with the goods. The term does not include a
computer program embedded in goods that consist solely of the
medium in which the program is embedded. The term also does
not include accounts, chattel paper, commercial tort claims,
deposit accounts, documents, general intangibles, instruments,
investment property, letter-of-credit rights, letters of credit,
money, or oil, gas, or other minerals before extraction.
(45) "Governmental unit" means a subdivision, agency,
department, county, parish, municipality, or other unit of the
government of the United States, a state, or a foreign country.
The term includes an organization having a separate corporate
existence if the organization is eligible to issue debt on which
interest is exempt from income taxation under the laws of the
United States.
(46) "Health-care-insurance receivable" means an interest in or
claim under a policy of insurance that is a right to payment of
a monetary obligation for health-care goods or services
provided.
(47) "Instrument" means a negotiable instrument or any other
writing that evidences a right to the payment of a monetary
obligation, is not itself a security agreement or lease, and is of
a type that in the ordinary course of business is transferred by
delivery with any necessary endorsement or assignment. The
term does not include (i) investment property, (ii) letters of
credit, or (iii) writings that evidence a right to payment arising
out of the use of a credit or charge card or information
contained on or for use with the card.
(48) "Inventory" means goods, other than farm products, that:
(A) are leased by a person as lessor;
(B) are held by a person for sale or lease or to be furnished
under a contract of service;
(C) are furnished by a person under a contract of service; or
(D) consist of raw materials, work in process, or materials
used or consumed in a business.
(49) "Investment property" means a security, whether
certificated or uncertificated, security entitlement, securities
account, commodity contract, or commodity account.
(50) "Jurisdiction of organization", with respect to a registered
organization, means the jurisdiction under whose law the
organization is formed or organized.
(51) "Letter-of-credit right" means a right to payment or
performance under a letter of credit, whether or not the
beneficiary has demanded or is at the time entitled to demand
payment or performance. The term does not include the right of
a beneficiary to demand payment or performance under a letter
of credit.
(52) "Lien creditor" means:
(A) a creditor that has acquired a lien on the property
involved by attachment, levy, or the like;
(B) an assignee for benefit of creditors from the time of
assignment;
(C) a trustee in bankruptcy from the date of the filing of the
petition; or
(D) a receiver in equity from the time of appointment.
(53) "Manufactured home" means a structure, transportable in
one (1) or more sections, which, in the traveling mode, is eight
(8) body feet or more in width or forty (40) body feet or more
in length, or, when erected on site, is three hundred twenty
(320) or more square feet, and which is built on a permanent
chassis and designed to be used as a dwelling with or without
a permanent foundation when connected to the required
utilities, and includes the plumbing, heating, air conditioning,
and electrical systems contained therein. The term includes any
structure that meets all of the requirements of this subdivision
except the size requirements, and with respect to which the
manufacturer voluntarily files a certification required by the
United States Secretary of Housing and Urban Development
and complies with the standards established under Title 42 of
the United States Code.
(54) "Manufactured-home transaction" means a secured
transaction:
functions with respect to, a person described in clause (A);
(D) the spouse of an individual described in clause (A), (B),
or (C); or
(E) an individual who is related by blood or marriage to an
individual described in clause (A), (B), (C), or (D) and
shares the same home with the individual.
(64) "Proceeds", except as used in IC 26-1-9.1-609(b), means
the following property:
(A) Whatever is acquired upon the sale, lease, license,
exchange, or other disposition of collateral.
(B) Whatever is collected on, or distributed on account of,
collateral.
(C) Rights arising out of collateral.
(D) To the extent of the value of collateral, claims arising
out of the loss, nonconformity, or interference with the use
of, defects or infringement of rights in, or damage to, the
collateral.
(E) To the extent of the value of collateral and to the extent
payable to the debtor or the secured party, insurance payable
by reason of the loss or nonconformity of, defects or
infringement of rights in, or damage to, the collateral.
(65) "Promissory note" means an instrument that evidences a
promise to pay a monetary obligation, does not evidence an
order to pay, and does not contain an acknowledgment by a
bank that the bank has received for deposit a sum of money or
funds.
(66) "Proposal" means a record authenticated by a secured party
that includes the terms on which the secured party is willing to
accept collateral in full or partial satisfaction of the obligation
it secures pursuant to IC 26-1-9.1-620, IC 26-1-9.1-621, and
IC 26-1-9.1-622.
(67) "Public-finance transaction" means a secured transaction
in connection with which:
(A) debt securities are issued;
(B) all or a portion of the securities issued have an initial
stated maturity of at least twenty (20) years; and
(C) the debtor, obligor, secured party, account debtor, or
other person obligated on collateral, assignor or assignee of
a secured obligation, or assignor or assignee of a security
interest is a state or a governmental unit of a state.
(68) "Public organic record" means a record that is available to
the public for inspection and is:
(A) a record consisting of the record initially filed with or
issued by a state or the United States to form or organize an
organization and any record filed with or issued by the state
or the United States which amends or restates the initial
record;
(B) an organic record of a business trust consisting of the
record initially filed with a state and any record filed with
the state which amends or restates the initial record, if a
statute of the state governing business trusts requires that the
record be filed with the state; or
(C) a record consisting of legislation enacted by the
legislature of a state or the Congress of the United States
which forms or organizes an organization, any record
amending the legislation, and any record filed with or issued
by the state or the United States which amends or restates
the name of the organization.
(69) "Pursuant to commitment", with respect to an advance
made or other value given by a secured party, means pursuant
to the secured party's obligation, whether or not a subsequent
event of default or other event not within the secured party's
control has relieved or may relieve the secured party from its
obligation.
(70) "Record", except as used in "for record", "of record",
"record or legal title", and "record owner", means information
that is inscribed on a tangible medium or that is stored in an
electronic or other medium and is retrievable in perceivable
form.
(71) "Registered organization" means an organization formed
or organized solely under the law of a single state or the United
States by the filing of a public organic record with, the issuance
of a public organic record by, or the enactment of legislation by
the state or the United States. The term includes a business trust
that is formed or organized under the law of a single state if a
statute of the state governing business trusts requires that the
business trust's organic record be filed with the state.
(72) "Secondary obligor" means an obligor to the extent that:
(A) the obligor's obligation is secondary; or
(B) the obligor has a right of recourse with respect to an
obligation secured by collateral against the debtor, another
obligor, or property of either.
(73) "Secured party" means:
(A) a person in whose favor a security interest is created or
provided for under a security agreement, whether or not any
obligation to be secured is outstanding;
(B) a person that holds an agricultural lien;
(C) a consignor;
(D) a person to which accounts, chattel paper, payment
intangibles, or promissory notes have been sold;
(E) a trustee, indenture trustee, agent, collateral agent, or
other representative in whose favor a security interest or
agricultural lien is created or provided for; or
(F) a person that holds a security interest arising under
IC 26-1-2-401, IC 26-1-2-505, IC 26-1-2-711(3),
IC 26-1-2.1-508(5), IC 26-1-4-210, or IC 26-1-5.1-118.
(74) "Security agreement" means an agreement that creates or
provides for a security interest.
(75) "Send", in connection with a record or notification, means:
(A) to deposit in the mail, deliver for transmission, or
transmit by any other usual means of communication, with
postage or cost of transmission provided for, addressed to
any address reasonable under the circumstances; or
(B) to cause the record or notification to be received within
the time that it would have been received if properly sent
under clause (A).
(76) "Software" means a computer program and any supporting
information provided in connection with a transaction relating
to the program. The term does not include a computer program
that is included in the definition of goods.
(77) "State" means a state of the United States, the District of
Columbia, Puerto Rico, the United States Virgin Islands, or any
territory or insular possession subject to the jurisdiction of the
United States.
(78) "Supporting obligation" means a letter-of-credit right or
secondary obligation that supports the payment or performance
of an account, chattel paper, a document, a general intangible,
an instrument, or investment property.
(79) "Tangible chattel paper" means chattel paper evidenced by
a record or records consisting of information that is inscribed on
a tangible medium.
(80) "Termination statement" means an amendment of a
financing statement that:
(A) identifies, by its file number, the initial financing
statement to which it relates; and
(B) indicates either that it is a termination statement or that
the identified financing statement is no longer effective.
(81) "Transmitting utility" means a person primarily engaged in
the business of:
(A) operating a railroad, subway, street railway, or trolley
bus;
(B) transmitting communications electrically,
electromagnetically, or by light;
(C) transmitting goods by pipeline or sewer; or
(D) transmitting or producing and transmitting electricity,
steam, gas, or water.
(b) "Control" as provided in IC 26-1-7-106 and the following
definitions outside IC 26-1-9.1 apply to IC 26-1-9.1:
"Applicant" IC 26-1-5.1-102.
"Beneficiary" IC 26-1-5.1-102.
"Broker" IC 26-1-8.1-102.
"Certificated security" IC 26-1-8.1-102.
"Check" IC 26-1-3.1-104.
"Clearing corporation" IC 26-1-8.1-102.
"Contract for sale" IC 26-1-2-106.
"Customer" IC 26-1-4-104.
"Entitlement holder" IC 26-1-8.1-102.
"Financial asset" IC 26-1-8.1-102.
"Holder in due course" IC 26-1-3.1-302.
"Issuer" (with respect to a letter of credit or letter-of-credit
right) IC 26-1-5.1-102.
"Issuer" (with respect to a security) IC 26-1-8.1-201.
"Issuer" (with respect to documents of title) IC 26-1-7-102.
"Lease" IC 26-1-2.1-103.
"Lease agreement" IC 26-1-2.1-103.
"Lease contract" IC 26-1-2.1-103.
"Leasehold interest" IC 26-1-2.1-103.
"Lessee" IC 26-1-2.1-103.
"Lessee in ordinary course of business" IC 26-1-2.1-103.
"Lessor" IC 26-1-2.1-103.
"Lessor's residual interest" IC 26-1-2.1-103.
"Letter of credit" IC 26-1-5.1-102.
"Merchant" IC 26-1-2-104.
"Negotiable instrument" IC 26-1-3.1-104.
"Nominated person" IC 26-1-5.1-102.
"Note" IC 26-1-3.1-104.
"Proceeds of a letter of credit" IC 26-1-5.1-114.
"Prove" IC 26-1-3.1-103.
"Sale" IC 26-1-2-106.
"Securities account" IC 26-1-8.1-501.
"Securities intermediary" IC 26-1-8.1-102.
"Security" IC 26-1-8.1-102.
"Security certificate" IC 26-1-8.1-102.
"Security entitlement" IC 26-1-8.1-102.
"Uncertificated security" IC 26-1-8.1-102.
(c) IC 26-1-1 contains general definitions and principles of
construction and interpretation applicable throughout IC 26-1-9.1.
As added by P.L.57-2000, SEC.45. Amended by P.L.143-2007,
SEC.65; P.L.108-2009, SEC.3; P.L.54-2011, SEC.3.
IC 26-1-9.1-102.5
"Take free"; "takes free"; "takes the money free"; "takes the
funds free"
Sec. 102.5. As used in this chapter, "take free", "takes free",
"takes the money free", and "takes the funds free", when used in
conjunction with a security interest in collateral which is transferred,
means that following the transfer the collateral is no longer
encumbered by the security interest and the security interest is
terminated with respect to the transferred collateral.
As added by P.L.192-2003, SEC.1.
IC 26-1-9.1-103
Purchase-money security interest; application of payment; burden
of establishing
Sec. 103. (a) In this section:
(1) "Purchase-money collateral" means goods or software that
secures a purchase-money obligation incurred with respect to
that collateral.
(2) "Purchase-money obligation" means an obligation of an
obligor incurred as all or part of the price of the collateral or for
value given to enable the debtor to acquire rights in, or the use
of the collateral if the value is in fact so used.
(b) A security interest in goods is a purchase-money security
interest:
(1) to the extent that the goods are purchase-money collateral
with respect to that security interest;
(2) if the security interest is in inventory that is or was
purchase-money collateral, also to the extent that the security
interest secures a purchase-money obligation incurred with
respect to other inventory in which the secured party holds or
held a purchase-money security interest; and
(3) also to the extent that the security interest secures a
purchase-money obligation incurred with respect to software in
which the secured party holds or held a purchase-money
security interest.
(c) A security interest in software is a purchase-money security
interest to the extent that the security interest also secures a
purchase-money obligation incurred with respect to goods in which
the secured party holds or held a purchase-money security interest if:
(1) the debtor acquired its interest in the software in an
integrated transaction in which it acquired an interest in the
goods; and
(2) the debtor acquired its interest in the software for the
principal purpose of using the software in the goods.
(d) The security interest of a consignor in goods that are the
subject of a consignment is a purchase-money security interest in
inventory.
(e) If the extent to which a security interest is a purchase-money
security interest depends on the application of a payment to a
particular obligation, the payment must be applied:
(1) in accordance with any reasonable method of application to
which the parties agree;
(2) in the absence of the parties' agreement to a reasonable
method, in accordance with any intention of the obligor
manifested at or before the time of payment; or
(3) in the absence of an agreement to a reasonable method and
a timely manifestation of the obligor's intention, in the
following order:
(A) To obligations that are not secured.
(B) If more than one (1) obligation is secured, to obligations
secured by purchase-money security interests in the order in
which those obligations were incurred.
(f) A purchase-money security interest does not lose its status as
such, even if:
(1) the purchase-money collateral also secures an obligation
that is not a purchase-money obligation;
(2) collateral that is not purchase-money collateral also secures
the purchase-money obligation; or
(3) the purchase-money obligation has been renewed,
refinanced, consolidated, or restructured.
IC 26-1-9.1-104
Control of deposit account
Sec. 104. (a) A secured party has control of a deposit account if:
(1) the secured party is the bank with which the deposit account
is maintained;
(2) the debtor, secured party, and bank have agreed in an
authenticated record that the bank will comply with instructions
originated by the secured party directing disposition of the
funds in the account without further consent by the debtor; or
(3) the secured party becomes the bank's customer with respect
to the deposit account.
(b) A secured party that has satisfied subsection (a) has control,
even if the debtor retains the right to direct the disposition of funds
from the deposit account.
As added by P.L.57-2000, SEC.45.
IC 26-1-9.1-105 Version a
Control of electronic chattel paper
Note: This version of section effective until 7-1-2013. See also
following version of this section, effective 7-1-2013.
Sec. 105. A secured party has control of electronic chattel paper
if the record or records comprising the chattel paper are created,
stored, and assigned in such a manner that:
(1) a single authoritative copy of the record or records exists
which is unique, identifiable and, except as otherwise provided
in subdivisions (4), (5), and (6), unalterable;
(2) the authoritative copy identifies the secured party as the
assignee of the record or records;
(3) the authoritative copy is communicated to and maintained
by the secured party or its designated custodian;
(4) copies or revisions that add or change an identified assignee
of the authoritative copy can be made only with the
participation of the secured party;
(5) each copy of the authoritative copy and any copy of a copy
is readily identifiable as a copy that is not the authoritative
copy; and
(6) any revision of the authoritative copy is readily identifiable
as an authorized or unauthorized revision.
As added by P.L.57-2000, SEC.45.
IC 26-1-9.1-105 Version b
Control of electronic chattel paper
Note: This version of section effective 7-1-2013. See also
preceding version of this section, effective until 7-1-2013.
Sec. 105. (a) A secured party has control of electronic chattel
paper if a system employed for evidencing the transfer of interests in
the chattel paper reliably establishes the secured party as the person
to which the chattel paper was assigned.
(b) A system satisfies subsection (a) if the record or records
comprising the chattel paper are created, stored, and assigned in such
a manner that:
(1) a single authoritative copy of the record or records exists
which is unique, identifiable and, except as otherwise provided
in subdivisions (4), (5), and (6), unalterable;
(2) the authoritative copy identifies the secured party as the
assignee of the record or records;
(3) the authoritative copy is communicated to and maintained
by the secured party or its designated custodian;
(4) copies or amendments that add or change an identified
assignee of the authoritative copy can be made only with the
consent of the secured party;
(5) each copy of the authoritative copy and any copy of a copy
is readily identifiable as a copy that is not the authoritative
copy; and
(6) any amendment of the authoritative copy is readily
identifiable as authorized or unauthorized.
As added by P.L.57-2000, SEC.45. Amended by P.L.54-2011, SEC.4.
IC 26-1-9.1-106
Control of investment property
Sec. 106. (a) A person has control of a certificated security,
uncertificated security, or security entitlement as provided in
IC 26-1-8.1-106.
(b) A secured party has control of a commodity contract if:
(1) the secured party is the commodity intermediary with which
the commodity contract is carried; or
(2) the commodity customer, secured party, and commodity
intermediary have agreed that the commodity intermediary will
apply any value distributed on account of the commodity
contract as directed by the secured party without further consent
by the commodity customer.
(c) A secured party having control of all security entitlements or
commodity contracts carried in a securities account or commodity
account has control over the securities account or commodity
account.
As added by P.L.57-2000, SEC.45.
IC 26-1-9.1-107
Control of letter-of-credit right
Sec. 107. A secured party has control of a letter-of-credit right to
the extent of any right to payment or performance by the issuer or
any nominated person if the issuer or nominated person has
consented to an assignment of proceeds of the letter of credit under
IC 26-1-5.1-114(c) or otherwise applicable law or practice.
As added by P.L.57-2000, SEC.45.
IC 26-1-9.1-109
Scope
Sec. 109. (a) Except as otherwise provided in subsections (c) and
(d), IC 26-1-9.1 applies to:
(1) a transaction, regardless of its form, that creates a security
interest in personal property or fixtures by contract;
(2) an agricultural lien;
(3) a sale of accounts, chattel paper, payment intangibles, or
promissory notes;
(4) a consignment;
(5) a security interest arising under IC 26-1-2-401,
IC 26-1-2-505, IC 26-1-2-711(3), or IC 26-1-2.1-508(5), as
provided in IC 26-1-9.1-110;
(6) a security interest arising under IC 26-1-4-210 or
IC 26-1-5.1-118; and
(7) a transfer of an interest or a claim in a contractual right of
a person to receive commissions or other compensation payable
by an insurer (as defined in IC 27-1-2-3).
(b) The application of IC 26-1-9.1 to a security interest in a
secured obligation is not affected by the fact that the obligation is
itself secured by a transaction or interest to which IC 26-1-9.1 does
not apply.
(c) IC 26-1-9.1 does not apply to the extent that:
(1) a statute, regulation, or treaty of the United States preempts
IC 26-1-9.1; or
(2) the rights of a transferee beneficiary or nominated person
under a letter of credit are independent and superior under
IC 26-1-5.1-114.
(d) IC 26-1-9.1 does not apply to:
(1) a landlord's lien, other than an agricultural lien;
(2) a lien, other than an agricultural lien, given by statute or
other rule of law for services or materials, but IC 26-1-9.1-333
applies with respect to priority of the lien;
(3) an assignment of a claim for wages, salary, or other
compensation of an employee;
(4) a sale of accounts, chattel paper, payment intangibles, or
promissory notes as part of a sale of the business out of which
they arose;
(5) an assignment of accounts, chattel paper, payment
intangibles, or promissory notes that is for the purpose of
collection only;
(6) an assignment of a right to payment under a contract to an
assignee that is also obligated to perform under the contract;
(7) an assignment of a single account, payment intangible, or
promissory note to an assignee in full or partial satisfaction of
a preexisting indebtedness;
(8) a transfer of an interest in or an assignment of a claim under
a policy of insurance, other than a transfer described in
subsection (a)(7), or an assignment by or to a health-care
provider of a health-care-insurance receivable and any
subsequent assignment of the right to payment, but
IC 26-1-9.1-315 and IC 26-1-9.1-322 apply with respect to
proceeds and priorities in proceeds;
(9) an assignment of a right represented by a judgment, other
than a judgment taken on a right to payment that was collateral;
(10) a right of recoupment or set-off, but:
(A) IC 26-1-9.1-340 applies with respect to the effectiveness
of rights of recoupment or set-off against deposit accounts;
and
(B) IC 26-1-9.1-404 applies with respect to defenses or
claims of an account debtor;
(11) the creation or transfer of an interest in or lien on real
property, including a lease or rents thereunder, except to the
extent that provision is made for:
(A) liens on real property in IC 26-1-9.1-203 and
IC 26-1-9.1-308;
(B) fixtures in IC 26-1-9.1-334;
IC 26-1-9.1-110
Security interests arising under IC 26-1-2 or IC 26-1-2.1
Sec. 110. A security interest arising under IC 26-1-2-401,
IC 26-1-2-505, IC 26-1-2-711(3), or IC 26-1-2.1-508(5) is subject to
IC 26-1-9.1. However, until the debtor obtains possession of the
goods:
(1) the security interest is enforceable, even if
IC 26-1-9.1-203(b)(3) has not been satisfied;
(2) filing is not required to perfect the security interest;
(3) the rights of the secured party after default by the debtor are
governed by IC 26-1-2 or IC 26-1-2.1; and
(4) the security interest has priority over a conflicting security
interest created by the debtor.
As added by P.L.57-2000, SEC.45.
IC 26-1-9.1-201
General effectiveness of security agreement
Sec. 201. (a) Except as otherwise provided in IC 26-1, a security
agreement is effective according to its terms between the parties,
against purchasers of the collateral, and against creditors.
(b) A transaction subject to this article is subject to any applicable
rule of law that establishes a different rule for consumers.
(c) In case of conflict between IC 26-1-9.1 and a rule of law,
statute, or regulation described in subsection (b), the rule of law,
statute, or regulation controls. Failure to comply with a statute or
regulation described in subsection (b) has only the effect the statute
or regulation specifies.
IC 26-1-9.1-202
Title to collateral immaterial
Sec. 202. Except as otherwise provided with respect to
consignments or sales of accounts, chattel paper, payment
intangibles, or promissory notes, the provisions of this article with
regard to rights and obligations apply whether title to collateral is in
the secured party or the debtor.
As added by P.L.57-2000, SEC.45.
IC 26-1-9.1-203
Attachment and enforceability of security interest; proceeds;
supporting obligations; formal requisites
Sec. 203. (a) A security interest attaches to collateral when it
becomes enforceable against the debtor with respect to the collateral,
unless an agreement expressly postpones the time of attachment.
(b) Except as otherwise provided in subsections (c) through (i), a
security interest is enforceable against the debtor and third parties
with respect to the collateral only if:
(1) value has been given;
(2) the debtor has rights in the collateral or the power to transfer
rights in the collateral to a secured party; and
(3) one (1) of the following conditions is met:
(A) The debtor has authenticated a security agreement that
provides a description of the collateral and, if the security
interest covers timber to be cut, a description of the land
concerned.
(B) The collateral is not a certificated security and is in the
possession of the secured party under IC 26-1-9.1-313
pursuant to the debtor's security agreement.
(C) The collateral is a certificated security in registered form
and the security certificate has been delivered to the secured
party under IC 26-1-8.1-301 pursuant to the debtor's security
agreement.
(D) The collateral is deposit accounts, electronic chattel
paper, investment property, letter-of-credit rights, or
electronic documents, and the secured party has control
under IC 26-1-7-106, IC 26-1-9.1-104, IC 26-1-9.1-105,
IC 26-1-9.1-106, or IC 26-1-9.1-107 pursuant to the debtor's
security agreement.
(c) Subsection (b) is subject to IC 26-1-4-210 on the security
interest of a collecting bank, IC 26-1-5.1-118 on the security interest
of a letter-of-credit issuer or nominated person, IC 26-1-9.1-110 on
a security interest arising under IC 26-1-2 or IC 26-1-2.1, and
IC 26-1-9.1-206 on security interests in investment property.
(d) A person becomes bound as debtor by a security agreement
entered into by another person if, by operation of law other than
IC 26-1-9.1 or by contract:
(1) the security agreement becomes effective to create a security
interest in the person's property; or
(2) the person becomes generally obligated for the obligations
of the other person, including the obligation secured under the
security agreement, and acquires or succeeds to all or
substantially all of the assets of the other person.
(e) If a new debtor becomes bound as debtor by a security
agreement entered into by another person:
(1) the agreement satisfies subsection (b)(3) with respect to
existing or after-acquired property of the new debtor to the
extent the property is described in the agreement; and
(2) another agreement is not necessary to make a security
interest in the property enforceable.
(f) The attachment of a security interest in collateral gives the
secured party the rights to proceeds provided by IC 26-1-9-315 and
is also attachment of a security interest in a supporting obligation for
the collateral.
(g) The attachment of a security interest in a right to payment or
performance secured by a security interest or other lien on personal
or real property is also attachment of a security interest in the
security interest, mortgage, or other lien.
(h) The attachment of a security interest in a securities account is
also attachment of a security interest in the security entitlements
carried in the securities account.
(i) The attachment of a security interest in a commodity account
is also attachment of a security interest in the commodity contracts
carried in the commodity account.
As added by P.L.57-2000, SEC.45. Amended by P.L.143-2007,
SEC.66.
IC 26-1-9.1-204
After-acquired property; future advances
Sec. 204. (a) Except as otherwise provided in subsection (b), a
security agreement may create or provide for a security interest in
after-acquired collateral.
(b) A security interest does not attach under a term constituting an
after-acquired property clause to:
(1) consumer goods, other than an accession when given as
additional security, unless the debtor acquires rights in them
within ten (10) days after the secured party gives value; or
(2) a commercial tort claim.
(c) A security agreement may provide that collateral secures, or
that accounts, chattel paper, payment intangibles, or promissory
notes are sold in connection with, future advances or other value,
whether or not the advances or value are given pursuant to
commitment.
As added by P.L.57-2000, SEC.45.
IC 26-1-9.1-205
Use or disposition of collateral permissible
Sec. 205. (a) A security interest is not invalid or fraudulent
against creditors solely because:
(1) the debtor has the right or ability to:
(A) use, commingle, or dispose of all or part of the
collateral, including returned or repossessed goods;
(B) collect, compromise, enforce, or otherwise deal with
collateral;
(C) accept the return of collateral or make repossessions; or
(D) use, commingle, or dispose of proceeds; or
(2) the secured party fails to require the debtor to account for
proceeds or replace collateral.
(b) This section does not relax the requirements of possession if
attachment, perfection, or enforcement of a security interest depends
upon possession of the collateral by the secured party.
As added by P.L.57-2000, SEC.45.
IC 26-1-9.1-206
Security interest arising in purchase or delivery of financial asset
Sec. 206. (a) A security interest in favor of a securities
intermediary attaches to a person's security entitlement if:
(1) the person buys a financial asset through the securities
intermediary in a transaction in which the person is obligated to
pay the purchase price to the securities intermediary at the time
of the purchase; and
(2) the securities intermediary credits the financial asset to the
buyer's securities account before the buyer pays the securities
intermediary.
(b) The security interest described in subsection (a) secures the
person's obligation to pay for the financial asset.
(c) A security interest in favor of a person that delivers a
certificated security or other financial asset represented by a writing
attaches to the security or other financial asset if:
(1) the security or other financial asset:
(A) in the ordinary course of business is transferred by
delivery with any necessary endorsement or assignment; and
(B) is delivered under an agreement between persons in the
business of dealing with such securities or financial assets;
and
(2) the agreement calls for delivery against payment.
(d) The security interest described in subsection (c) secures the
obligation to make payment for the delivery.
As added by P.L.57-2000, SEC.45.
IC 26-1-9.1-207
Rights and duties of secured party having possession or control of
collateral
Sec. 207. (a) Except as otherwise provided in subsection (d), a
secured party shall use reasonable care in the custody and
preservation of collateral in the secured party's possession. In the
case of chattel paper or an instrument, reasonable care includes
taking necessary steps to preserve rights against prior parties unless
otherwise agreed.
(b) Except as otherwise provided in subsection (d), if a secured
party has possession of collateral:
(1) reasonable expenses, including the cost of insurance and
payment of taxes or other charges, incurred in the custody,
preservation, use, or operation of the collateral are chargeable
to the debtor and are secured by the collateral;
(2) the risk of accidental loss or damage is on the debtor to the
extent of a deficiency in any effective insurance coverage;
(3) the secured party shall keep the collateral identifiable, but
fungible collateral may be commingled; and
(4) the secured party may use or operate the collateral:
(A) for the purpose of preserving the collateral or its value;
(B) as permitted by an order of a court having competent
jurisdiction; or
(C) except in the case of consumer goods, in the manner and
to the extent agreed by the debtor.
(c) Except as otherwise provided in subsection (d), a secured party
having possession of collateral or control of collateral under
IC 26-1-7-106, IC 26-1-9.1-104, IC 26-1-9.1-105, IC 26-1-9.1-106,
or IC 26-1-9.1-107:
(1) may hold as additional security any proceeds, except money
or funds, received from the collateral;
(2) shall apply money or funds received from the collateral to
reduce the secured obligation, unless remitted to the debtor; and
(3) may create a security interest in the collateral.
(d) If the secured party is a buyer of accounts, chattel paper,
payment intangibles, or promissory notes or a consignor:
(1) subsection (a) does not apply unless the secured party is
entitled under an agreement:
(A) to charge back uncollected collateral; or
(B) otherwise to full or limited recourse against the debtor
or a secondary obligor based on the nonpayment or other
default of an account debtor or other obligor on the
collateral; and
(2) subsections (b) and (c) do not apply.
As added by P.L.57-2000, SEC.45. Amended by P.L.143-2007,
SEC.67.
IC 26-1-9.1-208
Additional duties of secured party having control of collateral
Sec. 208. (a) This section applies to cases in which there is no
outstanding secured obligation, and the secured party is not
committed to make advances, incur obligations, or otherwise give
value.
(b) Within ten (10) days after receiving an authenticated demand
by the debtor:
(1) a secured party having control of a deposit account under
IC 26-1-9.1-104(a)(2) shall send to the bank with which the
deposit account is maintained an authenticated statement that
releases the bank from any further obligation to comply with
instructions originated by the secured party;
(2) a secured party having control of a deposit account under
IC 26-1-9.1-104(a)(3) shall:
(A) pay the debtor the balance on deposit in the deposit
account; or
(B) transfer the balance on deposit into a deposit account in
the debtor's name;
(3) a secured party, other than a buyer, having control of
electronic chattel paper under IC 26-1-9.1-105 shall:
(A) communicate the authoritative copy of the electronic
chattel paper to the debtor or its designated custodian;
(B) if the debtor designates a custodian that is the designated
custodian with which the authoritative copy of the electronic
chattel paper is maintained for the secured party,
communicate to the custodian an authenticated record
releasing the designated custodian from any further
obligation to comply with instructions originated by the
secured party and instructing the custodian to comply with
instructions originated by the debtor; and
(C) take appropriate action to enable the debtor or its
designated custodian to make copies of or revisions to the
authoritative copy that add or change an identified assignee
of the authoritative copy without the consent of the secured
party;
(4) a secured party having control of investment property under
IC 26-1-8.1-106(d)(2) or IC 26-1-9.1-106(b) shall send to the
securities intermediary or commodity intermediary with which
the security entitlement or commodity contract is maintained an
authenticated record that releases the securities intermediary or
commodity intermediary from any further obligation to comply
with entitlement orders or directions originated by the secured
party;
(5) a secured party having control of a letter-of-credit right
under IC 26-1-9.1-107 shall send to each person having an
unfulfilled obligation to pay or deliver proceeds of the letter of
credit to the secured party an authenticated release from any
further obligation to pay or deliver proceeds of the letter of
credit to the secured party; and
(6) a secured party having control of an electronic document
shall:
(A) give control of the electronic document to the debtor or
its designated custodian;
(B) if the debtor designates a custodian that is the designated
custodian with which the authoritative copy of the electronic
document is maintained for the secured party, communicate
to the custodian an authenticated record releasing the
designated custodian from any further obligation to comply
with instructions originated by the secured party and
instructing the custodian to comply with instructions
originated by the debtor; and
(C) take appropriate action to enable the debtor or its
designated custodian to make copies of or revisions to the
authoritative copy that add or change an identified assignee
of the authoritative copy without the consent of the secured
party.
As added by P.L.57-2000, SEC.45. Amended by P.L.143-2007,
SEC.68.
IC 26-1-9.1-209
Duties of secured party if account debtor has been notified of
assignment
Sec. 209. (a) Except as otherwise provided in subsection (c), this
section applies if:
(1) there is no outstanding secured obligation; and
(2) the secured party is not committed to make advances, incur
obligations, or otherwise give value.
(b) Within ten (10) days after receiving an authenticated demand
by the debtor, a secured party shall send to an account debtor that has
received notification of an assignment to the secured party as
assignee under IC 26-1-9.1-406(a) an authenticated record that
releases the account debtor from any further obligation to the secured
party.
(c) This section does not apply to an assignment constituting the
sale of an account, chattel paper, or payment intangible.
As added by P.L.57-2000, SEC.45.
IC 26-1-9.1-210
Request for accounting; request regarding list of collateral or
statement of account
Sec. 210. (a) In this section the following definitions apply:
(1) "Request" means a record of a type described in subdivision
(2), (3), or (4).
(2) "Request for an accounting" means a record authenticated
by a debtor requesting that the recipient provide an accounting
of the unpaid obligations secured by collateral and reasonably
identifying the transaction or relationship that is the subject of
the request.
(3) "Request regarding a list of collateral" means a record
authenticated by a debtor requesting that the recipient approve
or correct a list of what the debtor believes to be the collateral
securing an obligation and reasonably identifying the
transaction or relationship that is the subject of the request.
(4) "Request regarding a statement of account" means a record
authenticated by a debtor requesting that the recipient approve
or correct a statement indicating what the debtor believes to be
the aggregate amount of unpaid obligations secured by
collateral as of a specified date and reasonably identifying the
transaction or relationship that is the subject of the request.
(b) Subject to subsections (c), (d), (e), and (f), a secured party,
other than a buyer of accounts, chattel paper, payment intangibles, or
promissory notes or a consignor, shall comply with a request within
fourteen (14) days after receipt:
(1) in the case of a request for an accounting, by authenticating
and sending to the debtor an accounting; and
(2) in the case of a request regarding a list of collateral or a
request regarding a statement of account, by authenticating and
sending to the debtor an approval or correction.
(c) A secured party that claims a security interest in all of a
particular type of collateral owned by the debtor may comply with a
request regarding a list of collateral by sending to the debtor an
authenticated record, including a statement to that effect within
fourteen (14) days after receipt.
(d) A person that receives a request regarding a list of collateral,
claims no interest in the collateral when it receives the request, and
claimed an interest in the collateral at an earlier time shall comply
with the request within fourteen (14) days after receipt by sending to
the debtor an authenticated record:
(1) disclaiming any interest in the collateral; and
(2) if known to the recipient, providing the name and mailing
address of any assignee of or successor to the recipient's interest
in the collateral.
(e) A person that receives a request for an accounting or a request
regarding a statement of account, claims no interest in the obligations
when the person receives the request, and claimed an interest in the
obligations at an earlier time shall comply with the request within
fourteen (14) days after receipt by sending to the debtor an
authenticated record:
(1) disclaiming any interest in the obligations; and
(2) if known to the recipient, providing the name and mailing
address of any assignee of or successor to the recipient's interest
in the obligations.
(f) A debtor is entitled without charge to one (1) response to a
request under this section during any six (6) month period. The
secured party may require payment of a charge not exceeding
twenty-five dollars ($25) for each additional response.
As added by P.L.57-2000, SEC.45.
IC 26-1-9.1-301
Law governing perfection and priority of security interests
Sec. 301. Except as otherwise provided in IC 26-1-9.1-303
through IC 26-1-9.1-306, the following rules determine the law
governing perfection, the effect of perfection or nonperfection, and
the priority of a security interest in collateral:
IC 26-1-9.1-302
Law governing perfection and priority of agricultural liens
Sec. 302. While farm products are located in a jurisdiction, the
local law of that jurisdiction governs perfection, the effect of
perfection or nonperfection, and the priority of an agricultural lien on
the farm products.
As added by P.L.57-2000, SEC.45.
IC 26-1-9.1-303
Law governing perfection and priority of security interests in
goods covered by a certificate of title
Sec. 303. (a) This section applies to goods covered by a certificate
of title, even if there is no other relationship between the jurisdiction
under whose certificate of title the goods are covered and the goods
or the debtor.
(b) Goods become covered by a certificate of title when a valid
application for the certificate of title and the applicable fee are
delivered to the appropriate authority. Goods cease to be covered by
a certificate of title at the earlier of the time the certificate of title
ceases to be effective under the law of the issuing jurisdiction or the
time the goods become covered subsequently by a certificate of title
issued by another jurisdiction.
(c) The local law of the jurisdiction under whose certificate of
title the goods are covered governs perfection, the effect of
perfection or nonperfection, and the priority of a security interest in
goods covered by a certificate of title from the time the goods
become covered by the certificate of title until the goods cease to be
covered by the certificate of title.
As added by P.L.57-2000, SEC.45.
IC 26-1-9.1-304
Law governing perfection and priority of security interests in
deposit accounts
Sec. 304. (a) The local law of a bank's jurisdiction governs
perfection, the effect of perfection or nonperfection, and the priority
of a security interest in a deposit account maintained with that bank.
(b) The following rules determine a bank's jurisdiction for
purposes of IC 26-1-9.1-301 through IC 26-1-9.1-342:
(1) If an agreement between the bank and the debtor governing
the deposit account expressly provides that a particular
jurisdiction is the bank's jurisdiction for purposes of IC 26-1,
that jurisdiction is the bank's jurisdiction.
(2) If subdivision (1) does not apply and an agreement between
the bank and its customer governing the deposit account
expressly provides that the agreement is governed by the law of
a particular jurisdiction, that jurisdiction is the bank's
jurisdiction.
(3) If neither subdivision (1) nor subdivision (2) applies, and an
agreement between the bank and its customer governing the
deposit account expressly provides that the deposit account is
maintained at an office in a particular jurisdiction, that
jurisdiction is the bank's jurisdiction.
(4) If none of the preceding subdivisions apply, the bank's
jurisdiction is the jurisdiction in which the office identified in
an account statement as the office serving the customer's
account is located.
(5) If none of the preceding subdivisions apply, the bank's
jurisdiction is the jurisdiction in which the chief executive
office of the bank is located.
As added by P.L.57-2000, SEC.45. Amended by P.L.165-2001,
SEC.2.
IC 26-1-9.1-305
Law governing perfection and priority of security interests in
investment property
Sec. 305. (a) Except as otherwise provided in subsection (c), the
following rules apply:
(1) While a security certificate is located in a jurisdiction, the
local law of that jurisdiction governs perfection, the effect of
perfection or nonperfection, and the priority of a security
interest in the certificated security represented thereby.
(2) The local law of the issuer's jurisdiction as specified in
IC 26-1- 8.1-110(d) governs perfection, the effect of perfection
or nonperfection, and the priority of a security interest in an
uncertificated security.
(3) The local law of the securities intermediary's jurisdiction as
specified in IC 26-1-8.1-110(e) governs perfection, the effect of
perfection or nonperfection, and the priority of a security
interest in a security entitlement or securities account.
(4) The local law of the commodity intermediary's jurisdiction
governs perfection, the effect of perfection or nonperfection,
and the priority of a security interest in a commodity contract or
commodity account.
(b) The following rules determine a commodity intermediary's
jurisdiction for purposes of IC 26-1-9.1-301 through IC 26-1-9.1-342:
(1) If an agreement between the commodity intermediary and
commodity customer governing the commodity account
expressly provides that a particular jurisdiction is the
commodity intermediary's jurisdiction for purposes of IC 26-1,
that jurisdiction is the commodity intermediary's jurisdiction.
(2) If subdivision (1) does not apply, and an agreement between
the commodity intermediary and commodity customer
governing the commodity account expressly provides that the
agreement is governed by the law of a particular jurisdiction,
that jurisdiction is the commodity intermediary's jurisdiction.
(3) If neither subdivision (1) nor subdivision (2) applies, and an
agreement between the commodity intermediary and commodity
customer governing the commodity account expressly provides
that the commodity account is maintained at an office in a
particular jurisdiction, that jurisdiction is the commodity
intermediary's jurisdiction.
(4) If none of the preceding subdivisions apply, the commodity
intermediary's jurisdiction is the jurisdiction in which the office
identified in an account statement as the office serving the
commodity customer's account is located.
(5) If none of the preceding subdivisions apply, the commodity
intermediary's jurisdiction is the jurisdiction in which the chief
executive office of the commodity intermediary is located.
(c) The local law of the jurisdiction in which the debtor is located
governs:
(1) perfection of a security interest in investment property by
filing;
(2) automatic perfection of a security interest in investment
property created by a broker or securities intermediary; and
(3) automatic perfection of a security interest in a commodity
contract or commodity account created by a commodity
intermediary.
As added by P.L.57-2000, SEC.45. Amended by P.L.165-2001,
SEC.3.
IC 26-1-9.1-306
Law governing perfection and priority of security interests in
letter-of-credit rights
Sec. 306. (a) Subject to subsection (c), the local law of the issuer's
jurisdiction or a nominated person's jurisdiction governs perfection,
the effect of perfection or nonperfection, and the priority of a
security interest in a letter-of-credit right if the issuer's jurisdiction
or nominated person's jurisdiction is a state.
(b) For purposes of IC 26-1-9.1-301 through IC 26-1-9.1-342, an
issuer's jurisdiction or nominated person's jurisdiction is the
jurisdiction whose law governs the liability of the issuer or
nominated person with respect to the letter-of-credit right as provided
in IC 26-1-5.1-116.
(c) This section does not apply to a security interest that is
perfected only under IC 26-1-9.1-308(d).
As added by P.L.57-2000, SEC.45. Amended by P.L.165-2001,
SEC.4.
IC 26-1-9.1-307 Version a
Location of debtor
Note: This version of section effective until 7-1-2013. See also
following version of this section, effective 7-1-2013.
Sec. 307. (a) In this section, "place of business" means a place
where a debtor conducts its affairs.
(b) Except as otherwise provided in this section, the following
rules determine a debtor's location:
(1) A debtor who is an individual is located at the individual's
principal residence.
(2) A debtor that is an organization and has only one (1) place
of business is located at its place of business.
(3) A debtor that is an organization and has more than one (1)
place of business is located at its chief executive office.
(c) Subsection (b) applies only if a debtor's residence, place of
business, or chief executive office, as applicable, is located in a
jurisdiction whose law generally requires information concerning the
existence of a nonpossessory security interest to be made generally
available in a filing, recording, or registration system as a condition
or result of the security interest's obtaining priority over the rights of
a lien creditor with respect to the collateral. If subsection (b) does not
apply, the debtor is located in the District of Columbia.
(d) A person that ceases to exist, have a residence, or have a place
of business continues to be located in the jurisdiction specified by
subsections (b) and (c).
(e) A registered organization that is organized under the law of a
state is located in that state.
(f) Except as otherwise provided in subsection (i), a registered
organization that is organized under the law of the United States and
a branch or agency of a bank that is not organized under the law of
the United States or a state are located:
(1) in the state that the law of the United States designates, if
the law designates a state of location;
(2) in the state that the registered organization, branch, or
agency designates, if the law of the United States authorizes the
registered organization, branch, or agency to designate its state
of location; or
(3) in the District of Columbia, if neither paragraph (1) nor
paragraph (2) applies.
(g) A registered organization continues to be located in the
jurisdiction specified by subsection (e) or (f) notwithstanding:
(1) the suspension, revocation, forfeiture, or lapse of the
registered organization's status as such in its jurisdiction of
organization; or
(2) the dissolution, winding up, or cancellation of the existence
of the registered organization.
(h) The United States is located in the District of Columbia.
(i) A branch or agency of a bank that is not organized under the
law of the United States or a state is located in the state in which the
branch or agency is licensed, if all branches and agencies of the bank
are licensed in only one state.
(j) A foreign air carrier under the Federal Aviation Act of 1958,
as amended, is located at the designated office of the agent upon
which service of process may be made on behalf of the carrier.
(k) This section applies only for purposes of IC 26-1-9.1-301
through IC 26-1-9.1-342.
As added by P.L.57-2000, SEC.45. Amended by P.L.165-2001,
SEC.5.
IC 26-1-9.1-307 Version b
Location of debtor
Note: This version of section effective 7-1-2013. See also
preceding version of this section, effective until 7-1-2013.
Sec. 307. (a) In this section, "place of business" means a place
where a debtor conducts its affairs.
(b) Except as otherwise provided in this section, the following
rules determine a debtor's location:
(1) A debtor who is an individual is located at the individual's
principal residence.
(2) A debtor that is an organization and has only one (1) place
of business is located at its place of business.
(3) A debtor that is an organization and has more than one (1)
place of business is located at its chief executive office.
(c) Subsection (b) applies only if a debtor's residence, place of
business, or chief executive office, as applicable, is located in a
jurisdiction whose law generally requires information concerning the
existence of a nonpossessory security interest to be made generally
available in a filing, recording, or registration system as a condition
or result of the security interest's obtaining priority over the rights of
a lien creditor with respect to the collateral. If subsection (b) does not
apply, the debtor is located in the District of Columbia.
(d) A person that ceases to exist, have a residence, or have a place
of business continues to be located in the jurisdiction specified by
subsections (b) and (c).
(e) A registered organization that is organized under the law of a
state is located in that state.
(f) Except as otherwise provided in subsection (i), a registered
organization that is organized under the law of the United States and
a branch or agency of a bank that is not organized under the law of
the United States or a state are located:
(1) in the state that the law of the United States designates, if
the law designates a state of location;
(2) in the state that the registered organization, branch, or
agency designates, if the law of the United States authorizes the
registered organization, branch, or agency to designate its state
of location, including by designating its main office, home
office, or other comparable office; or
(3) in the District of Columbia, if neither paragraph (1) nor
paragraph (2) applies.
(g) A registered organization continues to be located in the
jurisdiction specified by subsection (e) or (f) notwithstanding:
(1) the suspension, revocation, forfeiture, or lapse of the
registered organization's status as such in its jurisdiction of
organization; or
(2) the dissolution, winding up, or cancellation of the existence
of the registered organization.
(h) The United States is located in the District of Columbia.
(i) A branch or agency of a bank that is not organized under the
law of the United States or a state is located in the state in which the
branch or agency is licensed, if all branches and agencies of the bank
are licensed in only one (1) state.
(j) A foreign air carrier under the Federal Aviation Act of 1958,
as amended, is located at the designated office of the agent upon
which service of process may be made on behalf of the carrier.
(k) This section applies only for purposes of IC 26-1-9.1-301
through IC 26-1-9.1-342.
As added by P.L.57-2000, SEC.45. Amended by P.L.165-2001,
SEC.5; P.L.54-2011, SEC.5.
IC 26-1-9.1-308
When security interest or agricultural lien is perfected; continuity
of perfection
Sec. 308. (a) Except as otherwise provided in this section and
IC 26-1-9.1-309, a security interest is perfected if it has attached and
all of the applicable requirements for perfection in IC 26-1-9.1-310
through IC 26-1-9.1-316 have been satisfied. A security interest is
perfected when it attaches if the applicable requirements are satisfied
before the security interest attaches.
(b) An agricultural lien is perfected if it has become effective and
all of the applicable requirements for perfection in IC 26-1-9.1-310
have been satisfied. An agricultural lien is perfected when it becomes
effective if the applicable requirements are satisfied before the
agricultural lien becomes effective.
(c) A security interest or agricultural lien is perfected
continuously if it is originally perfected by one method under
IC 26-1-9.1 and is later perfected by another method under
IC 26-1-9.1, without an intermediate period when it was unperfected.
(d) Perfection of a security interest in collateral also perfects a
security interest in a supporting obligation for the collateral.
(e) Perfection of a security interest in a right to payment or
performance also perfects a security interest in a security interest,
mortgage, or other lien on personal or real property securing the
right.
(f) Perfection of a security interest in a securities account also
perfects a security interest in the security entitlements carried in the
securities account.
(g) Perfection of a security interest in a commodity account also
perfects a security interest in the commodity contracts carried in the
commodity account.
As added by P.L.57-2000, SEC.45.
IC 26-1-9.1-309
Security interest perfected upon attachment
Sec. 309. The following security interests are perfected when they
attach:
(1) A purchase-money security interest in consumer goods,
except as otherwise provided in IC 26-1-9.1-311(b) with respect
to consumer goods that are subject to a statute or treaty
described in IC 26-1-9.1-311(a).
(2) An assignment of accounts or payment intangibles which
does not by itself or in conjunction with other assignments to
the same assignee transfer a significant part of the assignor's
outstanding accounts or payment intangibles.
(3) A sale of a payment intangible.
(4) A sale of a promissory note.
(5) A security interest created by the assignment of a
health-care-insurance receivable to the provider of the
health-care goods or services.
(6) A security interest arising under IC 26-1-2-401,
IC 26-1-2-505, IC 26-1-2-711(3), or IC 26-1-2.1-508(5), until
the debtor obtains possession of the collateral.
(7) A security interest of a collecting bank arising under
IC 26-1-4-210.
(8) A security interest of an issuer or nominated person arising
under IC 26-1-5.1-118.
(9) A security interest arising in the delivery of a financial asset
under IC 26-1-9.1-206(c).
(10) A security interest in investment property created by a
broker or securities intermediary.
(11) A security interest in a commodity contract or a
commodity account created by a commodity intermediary.
(12) An assignment for the benefit of all creditors of the
transferor and subsequent transfers by the assignee thereunder.
(13) A security interest created by an assignment of a beneficial
interest in a decedent's estate.
As added by P.L.57-2000, SEC.45.
IC 26-1-9.1-311 Version a
Perfection of security interests in property subject to certain
statutes, regulations, and treaties
Note: This version of section effective until 7-1-2013. See also
following version of this section, effective 7-1-2013.
Sec. 311. (a) Except as otherwise provided in subsection (d), the
filing of a financing statement is not necessary or effective to perfect
a security interest in property subject to:
(1) a statute, regulation, or treaty of the United States whose
requirements for a security interest's obtaining priority over the
rights of a lien creditor with respect to the property preempt
IC 26-1-9.1-310(a);
(2) any Indiana certificate-of-title statute covering automobiles,
trailers, mobile homes, or boats, which provides for a security
interest to be indicated on the certificate as a condition or result
of perfection; or
(3) a certificate-of-title statute of another jurisdiction which
provides for a security interest to be indicated on the certificate
as a condition or result of the security interest's obtaining
priority over the rights of a lien creditor with respect to the
property.
(b) Compliance with the requirements of a statute, regulation, or
treaty described in subsection (a) for obtaining priority over the
rights of a lien creditor is equivalent to the filing of a financing
statement under IC 26-1-9.1. Except as otherwise provided in
subsection (d), IC 26-1-9.1-313, IC 26-1-9.1-316(d), and
IC 26-1-9.1-316(e) for goods covered by a certificate of title, a
security interest in property subject to a statute, regulation, or treaty
described in subsection (a) may be perfected only by compliance
with those requirements, and a security interest so perfected remains
perfected notwithstanding a change in the use or transfer of
possession of the collateral.
(c) Except as otherwise provided in subsection (d),
IC 26-1-9.1-316(d), and IC 26-1-9.1-316(e), duration and renewal of
perfection of a security interest perfected by compliance with the
requirements prescribed by a statute, regulation, or treaty described
in subsection (a) are governed by the statute, regulation, or treaty. In
other respects, the security interest is subject to IC 26-1-9.1.
(d) During any period in which collateral, subject to a statute
specified in subsection (a)(2), is inventory held for sale or lease by
a person or leased by that person as lessor, and that person is in the
business of selling goods of that kind, this section does not apply to
a security interest in that collateral created by that person, but
instead, the filing provisions of IC 26-1-9.1-501 through
IC 26-1-9.1-527 apply.
As added by P.L.57-2000, SEC.45. Amended by P.L.210-2005,
SEC.74.
IC 26-1-9.1-311 Version b
Perfection of security interests in property subject to certain
statutes, regulations, and treaties
Note: This version of section effective 7-1-2013. See also
preceding version of this section, effective until 7-1-2013.
Sec. 311. (a) Except as otherwise provided in subsection (d), the
filing of a financing statement is not necessary or effective to perfect
a security interest in property subject to:
(1) a statute, regulation, or treaty of the United States whose
requirements for a security interest's obtaining priority over the
rights of a lien creditor with respect to the property preempt
IC 26-1-9.1-310(a);
(2) any Indiana statute covering automobiles, trailers, mobile
homes, or boats, which provides for a security interest to be
indicated on a certificate of title as a condition or result of
perfection; or
(3) a statute of another jurisdiction which provides for a
security interest to be indicated on a certificate of title as a
condition or result of the security interest's obtaining priority
over the rights of a lien creditor with respect to the property.
(b) Compliance with the requirements of a statute, regulation, or
treaty described in subsection (a) for obtaining priority over the
rights of a lien creditor is equivalent to the filing of a financing
statement under IC 26-1-9.1. Except as otherwise provided in
subsection (d), IC 26-1-9.1-313, IC 26-1-9.1-316(d), and
IC 26-1-9.1-316(e) for goods covered by a certificate of title, a
security interest in property subject to a statute, regulation, or treaty
described in subsection (a) may be perfected only by compliance
with those requirements, and a security interest so perfected remains
perfected notwithstanding a change in the use or transfer of
possession of the collateral.
(c) Except as otherwise provided in subsection (d),
IC 26-1-9.1-316(d), and IC 26-1-9.1-316(e), duration and renewal of
perfection of a security interest perfected by compliance with the
requirements prescribed by a statute, regulation, or treaty described
in subsection (a) are governed by the statute, regulation, or treaty. In
other respects, the security interest is subject to IC 26-1-9.1.
(d) During any period in which collateral, subject to a statute
specified in subsection (a)(2), is inventory held for sale or lease by
a person or leased by that person as lessor, and that person is in the
business of selling goods of that kind, this section does not apply to
a security interest in that collateral created by that person, but
instead, the filing provisions of IC 26-1-9.1-501 through
IC 26-1-9.1-527 apply.
As added by P.L.57-2000, SEC.45. Amended by P.L.210-2005,
SEC.74; P.L.54-2011, SEC.6.
IC 26-1-9.1-312
Perfection of security interests in chattel paper, deposit accounts,
documents, goods covered by documents, instruments, investment
property, letter-of-credit rights, and money; perfection by
permissive filing; temporary perfection without filing or transfer
of possession
Sec. 312. (a) A security interest in chattel paper, negotiable
documents, instruments, or investment property may be perfected by
filing.
(b) Except as otherwise provided in IC 26-1-9.1-315(c) and
IC 26-1-9.1-315(d), for proceeds:
(1) a security interest in a deposit account may be perfected
only by control under IC 26-1-9.1-314;
(2) and except as otherwise provided in IC 26-1-9.1-308(d), a
security interest in a letter-of-credit right may be perfected only
by control under IC 26-1-9.1-314; and
(3) a security interest in money may be perfected only by the
secured party's taking possession under IC 26-1-9.1-313.
(c) While goods are in the possession of a bailee that has issued
a negotiable document covering the goods:
IC 26-1-9.1-313
When possession by or delivery to secured party perfects security
interest without filing
Sec. 313. (a) Except as otherwise provided in subsection (b), a
secured party may perfect a security interest in tangible negotiable
documents, goods, instruments, money, or tangible chattel paper by
taking possession of the collateral. A secured party may perfect a
security interest in certificated securities by taking delivery of the
certificated securities under IC 26-1-8.1-301.
(b) With respect to goods covered by a certificate of title issued
by this state, a secured party may perfect a security interest in the
goods by taking possession of the goods only in the circumstances
described in IC 26-1-9.1-316(e).
(c) With respect to collateral other than certificated securities and
goods covered by a document, a secured party takes possession of
collateral in the possession of a person other than the debtor, the
secured party, or a lessee of the collateral from the debtor in the
ordinary course of the debtor's business, when:
(1) the person in possession authenticates a record
acknowledging that it holds possession of the collateral for the
secured party's benefit; or
(2) the person takes possession of the collateral after having
authenticated a record acknowledging that it will hold
possession of collateral for the secured party's benefit.
(d) If perfection of a security interest depends upon possession of
the collateral by a secured party, perfection occurs not earlier than
the time the secured party takes possession and continues only while
the secured party retains possession.
(e) A security interest in a certificated security in registered form
is perfected by delivery when delivery of the certificated security
occurs under IC 26-1-8.1-301 and remains perfected by delivery until
the debtor obtains possession of the security certificate.
(f) A person in possession of collateral is not required to
acknowledge that it holds possession for a secured party's benefit.
(g) If a person acknowledges that it holds possession for the
secured party's benefit:
(1) the acknowledgment is effective under subsection (c) or
IC 26-1-8.1-301(a), even if the acknowledgment violates the
rights of a debtor; and
(2) unless the person otherwise agrees or a law other than
IC 26-1-9.1 otherwise provides, the person does not owe any
duty to the secured party and is not required to confirm the
acknowledgment to another person.
(h) A secured party having possession of collateral does not
relinquish possession by delivering the collateral to a person other
than the debtor or a lessee of the collateral from the debtor in the
ordinary course of the debtor's business if the person was instructed
before the delivery or is instructed contemporaneously with the
delivery:
(1) to hold possession of the collateral for the secured party's
benefit; or
(2) to redeliver the collateral to the secured party.
(i) A secured party does not relinquish possession, even if a
delivery under subsection (h) violates the rights of a debtor. A person
to which collateral is delivered under subsection (h) does not owe
any duty to the secured party and is not required to confirm the
delivery to another person unless the person otherwise agrees or law
other than IC 26-1-9.1 otherwise provides.
As added by P.L.57-2000, SEC.45. Amended by P.L.143-2007,
SEC.72.
IC 26-1-9.1-315
Secured party's rights on disposition of collateral and in proceeds
Sec. 315. (a) Except as otherwise provided in IC 26-1-9.1 and in
IC 26-1-2-403(2):
(1) a security interest or agricultural lien continues in collateral
notwithstanding sale, lease, license, exchange, or other
disposition thereof unless the secured party authorized the
disposition free of the security interest or agricultural lien; and
(2) a security interest attaches to any identifiable proceeds of
collateral.
(b) Proceeds that are commingled with other property are
identifiable proceeds:
(1) if the proceeds are goods, to the extent provided by
IC 26-1-9.1-336; and
(2) if the proceeds are not goods, to the extent that the secured
party identifies the proceeds by a method of tracing, including
application of equitable principles, that is permitted under law
other than IC 26-1-9.1 with respect to commingled property of
the type involved.
(c) A security interest in proceeds is a perfected security interest
if the security interest in the original collateral was perfected.
(d) A perfected security interest in proceeds becomes unperfected
on the twenty-first day after the security interest attaches to the
proceeds unless:
(1) the following conditions are satisfied:
(A) A filed financing statement covers the original collateral.
(B) The proceeds are collateral in which a security interest
may be perfected by filing in the office in which the
financing statement has been filed.
(C) The proceeds are not acquired with cash proceeds.
(2) the proceeds are identifiable cash proceeds; or
(3) the security interest in the proceeds is perfected other than
under subsection (c) when the security interest attaches to the
proceeds or within twenty (20) days thereafter.
(e) If a filed financing statement covers the original collateral, a
security interest in proceeds which remains perfected under
subsection (d)(1) becomes unperfected at the later of:
(1) when the effectiveness of the filed financing statement
lapses under IC 26-1-9.1-515 or is terminated under
IC 26-1-9.1-513; or
(2) the twenty-first day after the security interest attaches to the
proceeds.
As added by P.L.57-2000, SEC.45.
IC 26-1-9.1-316 Version a
Continued perfection of security interest following change in
governing law
Note: This version of section effective until 7-1-2013. See also
following version of this section, effective 7-1-2013.
Sec. 316. (a) A security interest perfected pursuant to the law of
the jurisdiction designated in IC 26-1-9.1-301(1) or
IC 26-1-9.1-305(c) remains perfected until the earliest of:
(1) the time perfection would have ceased under the law of that
jurisdiction;
(2) the expiration of four (4) months after a change of the
debtor's location to another jurisdiction; or
(3) the expiration of one (1) year after a transfer of collateral to
a person that thereby becomes a debtor and is located in another
jurisdiction.
(b) If a security interest described in subsection (a) becomes
perfected under the law of the other jurisdiction before the earliest
time or event described in that subsection, it remains perfected
thereafter. If the security interest does not become perfected under
the law of the other jurisdiction before the earliest time or event, it
becomes unperfected and is deemed never to have been perfected as
against a purchaser of the collateral for value.
(c) A possessory security interest in collateral, other than goods
covered by a certificate of title and as-extracted collateral consisting
of goods, remains continuously perfected if:
(1) the collateral is located in one (1) jurisdiction and subject to
a security interest perfected under the law of that jurisdiction;
(2) thereafter the collateral is brought into another jurisdiction;
and
IC 26-1-9.1-316 Version b
Continued perfection of security interest following change in
governing law
Note: This version of section effective 7-1-2013. See also
preceding version of this section, effective until 7-1-2013.
Sec. 316. (a) A security interest perfected pursuant to the law of
the jurisdiction designated in IC 26-1-9.1-301(1) or
IC 26-1-9.1-305(c) remains perfected until the earliest of:
(1) the time perfection would have ceased under the law of that
jurisdiction;
(2) the expiration of four (4) months after a change of the
debtor's location to another jurisdiction; or
(3) the expiration of one (1) year after a transfer of collateral to
a person that thereby becomes a debtor and is located in another
jurisdiction.
(b) If a security interest described in subsection (a) becomes
perfected under the law of the other jurisdiction before the earliest
time or event described in that subsection, it remains perfected
thereafter. If the security interest does not become perfected under
the law of the other jurisdiction before the earliest time or event, it
becomes unperfected and is deemed never to have been perfected as
against a purchaser of the collateral for value.
(c) A possessory security interest in collateral, other than goods
covered by a certificate of title and as-extracted collateral consisting
of goods, remains continuously perfected if:
(1) the collateral is located in one (1) jurisdiction and subject to
a security interest perfected under the law of that jurisdiction;
(2) thereafter the collateral is brought into another jurisdiction;
and
(3) upon entry into the other jurisdiction, the security interest is
perfected under the law of the other jurisdiction.
(d) Except as otherwise provided in subsection (e), a security
interest in goods covered by a certificate of title which is perfected
by any method under the law of another jurisdiction when the goods
become covered by a certificate of title from this state remains
perfected until the security interest would have become unperfected
under the law of the other jurisdiction had the goods not become so
covered.
(e) A security interest described in subsection (d) becomes
unperfected as against a purchaser of the goods for value and is
deemed never to have been perfected as against a purchaser of the
goods for value if the applicable requirements for perfection under
IC 26-1-9.1-311(b) or IC 26-1-9.1-313 are not satisfied before the
earlier of:
(1) the time the security interest would have become
unperfected under the law of the other jurisdiction had the
goods not become covered by a certificate of title from this
state; or
(2) the expiration of four (4) months after the goods had
become so covered.
(f) A security interest in deposit accounts, letter-of-credit rights,
or investment property which is perfected under the law of the bank's
jurisdiction, the issuer's jurisdiction, a nominated person's
jurisdiction, the securities intermediary's jurisdiction, or the
commodity intermediary's jurisdiction, as applicable, remains
perfected until the earlier of:
(1) the time the security interest would have become
unperfected under the law of that jurisdiction; or
(2) the expiration of four (4) months after a change of the
applicable jurisdiction to another jurisdiction.
(g) If a security interest described in subsection (f) becomes
perfected under the law of the other jurisdiction before the earlier of
the time or the end of the period described in that subsection, it
remains perfected thereafter. If the security interest does not become
perfected under the law of the other jurisdiction before the earlier of
that time or the end of that period, it becomes unperfected and is
deemed never to have been perfected as against a purchaser of the
collateral for value.
(h) The following rules apply to collateral to which a security
interest attaches within four (4) months after the debtor changes its
location to another jurisdiction:
(1) A financing statement filed before the change under the law
of the jurisdiction designated in IC 26-1-9.1-301(1) or
IC 26-1-9.1-305(c) is effective to perfect a security interest in
the collateral if the financing statement would have been
effective to perfect a security interest in the collateral had the
debtor not changed its location.
(2) If a security interest perfected by a financing statement that
is effective under subdivision (1) becomes perfected under the
law of the other jurisdiction before the earlier of the time the
financing statement would have become ineffective under the
law of the jurisdiction designated in IC 26-1-9.1-301(1) or
IC 26-1-9.1-305(c) or the expiration of the four (4) month
period, it remains perfected thereafter. If the security interest
does not become perfected under the law of the other
jurisdiction before the earlier time or event, it becomes
unperfected and is deemed never to have been perfected as
against a purchaser of the collateral for value.
(i) If a financing statement naming an original debtor is filed
under the law of the jurisdiction designated in IC 26-1-9.1-301(1) or
IC 26-1-9.1-305(c) and the new debtor is located in another
jurisdiction, the following rules apply:
(1) The financing statement is effective to perfect a security
interest in collateral acquired by the new debtor before, and
within four (4) months after, the new debtor becomes bound
under IC 26-1-9.1-203(d), if the financing statement would have
been effective to perfect a security interest in the collateral had
the collateral been acquired by the original debtor.
(2) A security interest perfected by the financing statement and
which becomes perfected under the law of the other jurisdiction
before the earlier of the time the financing statement would
have become ineffective under the law of the jurisdiction
designated in IC 26-1-9.1-301(1) or IC 26-1-9.1-305(c) or the
expiration of the four (4) month period remains perfected
thereafter. A security interest that is perfected by the financing
statement but which does not become perfected under the law
of the other jurisdiction before the earlier time or event
becomes unperfected and is deemed never to have been
perfected as against a purchaser of the collateral for value.
IC 26-1-9.1-317 Version b
Interests that take priority over or take free of unperfected
security interest or agricultural lien
Note: This version of section effective 7-1-2013. See also
preceding version of this section, effective until 7-1-2013.
Sec. 317. (a) A security interest or agricultural lien is subordinate
to the rights of:
(1) a person entitled to priority under IC 26-1-9.1-322; and
IC 26-1-9.1-318
No interest retained in right to payment that is sold; rights and title
of seller of account or chattel paper with respect to creditors and
purchasers
Sec. 318. (a) A debtor that has sold an account, chattel paper,
payment intangible, or promissory note does not retain a legal or
equitable interest in the collateral sold.
(b) For purposes of determining the rights of creditors of, and
purchasers for value of an account or chattel paper from, a debtor
that has sold an account or chattel paper, while the buyer's security
interest is unperfected, the debtor is deemed to have rights and title
to the account or chattel paper identical to those the debtor sold.
As added by P.L.57-2000, SEC.45.
IC 26-1-9.1-319
Rights and title of consignee with respect to creditors and
purchasers
Sec. 319. (a) Except as otherwise provided in subsection (b), for
purposes of determining the rights of creditors of, and purchasers for
value of goods from, a consignee, while the goods are in the
possession of the consignee, the consignee has rights and title to the
goods identical to those the consignor had or had power to transfer.
(b) For purposes of determining the rights of a creditor of a
consignee, law other than this article determines the rights and title
of a consignee while goods are in the consignee's possession if, under
IC 26-1-9.1-301 through IC 26-1-9.1-342, a perfected security
interest held by the consignor would have priority over the rights of
the creditor.
As added by P.L.57-2000, SEC.45. Amended by P.L.165-2001,
SEC.7.
IC 26-1-9.1-320
Buyer of goods
Sec. 320. (a) Except as otherwise provided in this subsection and
subsection (e), a buyer in ordinary course of business takes free of a
security interest created by the buyer's seller, even if the security
interest is perfected and the buyer knows of its existence. The
following apply whenever a person is buying farm products from a
person engaged in farming operations who has created a security
interest on the farm products:
(1) A person buying farm products from a person engaged in
farming operations is not protected by this subsection if, within
one (1) year before the sale of the farm products, the buyer has
received prior written notice of the security interest. "Written
notice" means any writing that contains the following:
(A) The full name and address of the debtor.
(B) The full name and address of the secured party.
(C) In the case of a debtor doing business other than as an
individual, the United States Internal Revenue Service
taxpayer identification number of the debtor.
(D) A description of the collateral, including the type and
amount of farm products, the crop year, the county of
location, and a description of the real property on which the
farm products were grown or produced.
(E) Any payment obligations imposed on the buyer by the
secured party as conditions for waiver or release of the
security interest.
Notice must be received before a buyer of farm products has
made full payment to the person engaged in farming operations
for the farm products if the notice is to be considered "prior
written notice". The written notice lapses on either the
expiration period of the statement or the transmission of a
notice signed by the secured party that the statement has lapsed,
whichever occurs first.
(2) A secured party must, within fifteen (15) days of the
satisfaction of the debt, inform in writing each potential buyer
listed by the debtor whenever a debt has been satisfied and
written notice, as required by subdivision (1), had been
previously sent to that buyer.
IC 26-1-9.1-321
Licensee of general intangible and lessee of goods in ordinary
course of business
Sec. 321. (a) In this section, "licensee in ordinary course of
business" means a person that becomes a licensee of a general
intangible in good faith, without knowledge that the license violates
the rights of another person in the general intangible, and in the
ordinary course from a person in the business of licensing general
intangibles of that kind. A person becomes a licensee in the ordinary
course if the license to the person comports with the usual or
customary practices in the kind of business in which the licensor is
engaged or with the licensor's own usual or customary practices.
(b) A licensee in ordinary course of business takes its rights under
a nonexclusive license free of a security interest in the general
intangible created by the licensor, even if the security interest is
perfected and the licensee knows of its existence.
(c) A lessee in ordinary course of business takes its leasehold
interest free of a security interest in the goods created by the lessor,
even if the security interest is perfected and the lessee knows of its
existence.
As added by P.L.57-2000, SEC.45.
IC 26-1-9.1-322
Priorities among conflicting security interests in and agricultural
liens on same collateral
Sec. 322. (a) Except as otherwise provided in this section, priority
among conflicting security interests and agricultural liens in the same
collateral is determined according to the following rules:
(1) Conflicting perfected security interests and agricultural liens
rank according to priority in time of filing or perfection. Priority
dates from the earlier of the time a filing covering the collateral
is first made or the security interest or agricultural lien is first
perfected, if there is no period thereafter when there is neither
filing nor perfection.
(2) A perfected security interest or agricultural lien has priority
over a conflicting unperfected security interest or agricultural
lien.
(3) The first security interest or agricultural lien to attach or
become effective has priority if conflicting security interests
and agricultural liens are unperfected.
(b) For the purposes of subsection (a)(1):
(1) the time of filing or perfection as to a security interest in
collateral is also the time of filing or perfection as to a security
interest in proceeds; and
(2) the time of filing or perfection as to a security interest in
collateral supported by a supporting obligation is also the time
of filing or perfection as to a security interest in the supporting
obligation.
(c) Except as otherwise provided in subsection (f), a security
interest in collateral which qualifies for priority over a conflicting
security interest under IC 26-1-9.1-327, IC 26-1-9.1-328,
IC 26-1-9.1-329, IC 26-1-9.1-330, or IC 26-1-9.1-331 also has
priority over a conflicting security interest in:
(1) any supporting obligation for the collateral; and
(2) proceeds of the collateral if:
(A) the security interest in proceeds is perfected;
(B) the proceeds are cash proceeds or of the same type as the
collateral; and
(C) in the case of proceeds that are proceeds of proceeds, all
intervening proceeds are cash proceeds, proceeds of the
same type as the collateral, or an account relating to the
collateral.
(d) Subject to subsection (e) and except as otherwise provided in
subsection (f), if a security interest in chattel paper, deposit accounts,
negotiable documents, instruments, investment property, or
letter-of-credit rights is perfected by a method other than filing,
conflicting perfected security interests in proceeds of the collateral
rank according to priority in time of filing.
(e) Subsection (d) applies only if the proceeds of the collateral are
not cash proceeds, chattel paper, negotiable documents, instruments,
investment property, or letter-of-credit rights.
(f) Subsections (a) through (e) are subject to:
(1) subsection (g) and IC 26-1-9.1-301 through IC 26-1-9.1-342;
(2) IC 26-1-4-210 with respect to a security interest of a
collecting bank;
(3) IC 26-1-5.1-118 with respect to a security interest of an
issuer or nominated person; and
(4) IC 26-1-9.1-110 with respect to a security interest arising
under IC 26-1-2 or IC 26-1-2.1.
(g) A perfected agricultural lien on collateral has priority over a
conflicting security interest in or agricultural lien on the same
collateral if the statute creating the agricultural lien so provides.
As added by P.L.57-2000, SEC.45. Amended by P.L.165-2001,
SEC.8.
IC 26-1-9.1-323
Future advances
Sec. 323. (a) Except as otherwise provided in subsection (c), for
purposes of determining the priority of a perfected security interest
under IC 26-1-9.1-322(a)(1), perfection of the security interest dates
from the time an advance is made to the extent that the security
interest secures an advance that:
(1) is made while the security interest is perfected only:
(A) under IC 26-1-9.1-309 when it attaches; or
(B) temporarily under IC 26-1-9.1-312(e),
IC 26-1-9.1-312(f), or IC 26-1-9.1-312(g); and
IC 26-1-9.1-324
Priority of purchase-money security interests
Sec. 324. (a) Except as otherwise provided in subsection (g), a
perfected purchase-money security interest in goods other than
inventory or livestock has priority over a conflicting security interest
in the same goods, and, except as otherwise provided in
IC 26-1-9.1-327, a perfected security interest in its identifiable
proceeds also has priority, if the purchase-money security interest is
perfected when the debtor receives possession of the collateral or
within twenty (20) days thereafter.
(b) Subject to subsection (c) and except as otherwise provided in
subsection (g), a perfected purchase-money security interest in
inventory has priority over a conflicting security interest in the same
inventory, has priority over a conflicting security interest in chattel
paper or an instrument constituting proceeds of the inventory and in
proceeds of the chattel paper, if so provided in IC 26-1-9.1-330, and,
except as otherwise provided in IC 26-1-9.1-327, also has priority in
identifiable cash proceeds of the inventory to the extent the
identifiable cash proceeds are received on or before the delivery of
the inventory to a buyer, if:
(1) the purchase-money security interest is perfected when the
debtor receives possession of the inventory;
(2) the purchase-money secured party sends an authenticated
notification to the holder of the conflicting security interest;
(3) the holder of the conflicting security interest receives the
notification within five (5) years before the debtor receives
possession of the inventory; and
(4) the notification states that the person sending the
notification has or expects to acquire a purchase-money security
interest in inventory of the debtor and describes the inventory.
(c) Subsection (b)(2) through (b)(4) apply only if the holder of the
conflicting security interest had filed a financing statement covering
the same types of inventory:
(1) if the purchase-money security interest is perfected by filing,
before the date of the filing; or
(2) if the purchase-money security interest is temporarily
perfected without filing or possession under IC 26-1-9.1-312(f),
before the beginning of the twenty (20) day period thereunder.
(d) Subject to subsection (e) and except as otherwise provided in
subsection (g), a perfected purchase-money security interest in
livestock that are farm products has priority over a conflicting
security interest in the same livestock, and, except as otherwise
provided in IC 26-1-9.1-327, a perfected security interest in their
identifiable proceeds and identifiable products in their
unmanufactured states also has priority, if:
(1) the purchase-money security interest is perfected when the
debtor receives possession of the livestock;
(2) the purchase-money secured party sends an authenticated
notification to the holder of the conflicting security interest;
(3) the holder of the conflicting security interest receives the
notification within six (6) months before the debtor receives
possession of the livestock; and
(4) the notification states that the person sending the
notification has or expects to acquire a purchase-money security
interest in livestock of the debtor and describes the livestock.
(e) Subsection (d)(2) through (d)(4) apply only if the holder of the
conflicting security interest had filed a financing statement covering
the same types of livestock:
(1) if the purchase-money security interest is perfected by filing,
before the date of the filing; or
(2) if the purchase-money security interest is temporarily
perfected without filing or possession under IC 26-1-9.1-312(f),
before the beginning of the twenty (20) day period thereunder.
(f) Except as otherwise provided in subsection (g), a perfected
purchase-money security interest in software has priority over a
conflicting security interest in the same collateral, and, except as
otherwise provided in IC 26-1-9.1-327, a perfected security interest
in its identifiable proceeds also has priority, to the extent that the
purchase-money security interest in the goods in which the software
was acquired for use has priority in the goods and proceeds of the
goods under this section.
(g) If more than one (1) security interest qualifies for priority in
the same collateral under subsection (a), (b), (d), or (f):
(1) a security interest securing an obligation incurred as all or
part of the price of the collateral has priority over a security
interest securing an obligation incurred for value given to
enable the debtor to acquire rights in or the use of collateral;
and
(2) in all other cases, IC 26-1-9.1-322(a) applies to the
qualifying security interests.
As added by P.L.57-2000, SEC.45.
IC 26-1-9.1-325
Priority of security interests in transferred collateral
Sec. 325. (a) Except as otherwise provided in subsection (b), a
security interest created by a debtor is subordinate to a security
interest in the same collateral created by another person if:
(1) the debtor acquired the collateral subject to the security
interest created by the other person;
(2) the security interest created by the other person was
perfected when the debtor acquired the collateral; and
(3) there is no period thereafter when the security interest is
unperfected.
(b) Subsection (a) subordinates a security interest only if the
security interest:
(1) otherwise would have priority solely under
IC 26-1-9.1-322(a) or IC 26-1-9.1-324; or
(2) arose solely under IC 26-1-2-711(3) or IC 26-1-2.1-508(5).
As added by P.L.57-2000, SEC.45.
IC 26-1-9.1-326 Version a
Priority of security interests created by new debtor
Note: This version of section effective until 7-1-2013. See also
following version of this section, effective 7-1-2013.
Sec. 326. (a) Subject to subsection (b), a security interest created
by a new debtor which is perfected by a filed financing statement
that is effective solely under IC 26-1-9.1-508 in collateral in which
a new debtor has or acquires rights is subordinate to a security
interest in the same collateral that is perfected by another method.
(b) The other provisions of IC 26-1-9.1-301 through
IC 26-1-9.1-342 determine the priority among conflicting security
interests in the same collateral perfected by filed financing
statements that are effective solely under IC 26-1-9-508. However,
if the security agreements to which a new debtor became bound as a
debtor were not entered into by the same original debtor, the
conflicting security interests rank according to priority in time of the
new debtor's having become bound.
As added by P.L.57-2000, SEC.45.
IC 26-1-9.1-326 Version b
Priority of security interests created by new debtor
Note: This version of section effective 7-1-2013. See also
preceding version of this section, effective until 7-1-2013.
Sec. 326. (a) Subject to subsection (b), a security interest that is
created by a new debtor in collateral in which the new debtor has or
acquires rights and is perfected solely by a filed financing statement
that would be ineffective to perfect the security interest but for the
application of IC 26-1-9.1-316(i)(1) or IC 26-1-9.1-508 is
subordinate to a security interest in the same collateral that is
perfected by another method.
(b) The other provisions of IC 26-1-9.1-301 through
IC 26-1-9.1-342 determine the priority among conflicting security
interests in the same collateral perfected by filed financing
statements described in subsection (a). However, if the security
agreements to which a new debtor became bound as a debtor were
not entered into by the same original debtor, the conflicting security
interests rank according to priority in time of the new debtor's having
become bound.
As added by P.L.57-2000, SEC.45. Amended by P.L.54-2011, SEC.9.
IC 26-1-9.1-327
Priority of security interests in deposit account
Sec. 327. The following rules govern priority among conflicting
security interests in the same deposit account:
(1) A security interest held by a secured party having control of
the deposit account under IC 26-1-9.1-104 has priority over a
conflicting security interest held by a secured party that does
not have control.
(2) Except as otherwise provided in subdivisions (3) and (4),
security interests perfected by control under IC 26-1-9.1-314
rank according to priority in time of obtaining control.
(3) Except as otherwise provided in subdivision (4), a security
interest held by the bank with which the deposit account is
maintained has priority over a conflicting security interest held
by another secured party.
(4) A security interest perfected by control under
IC 26-1-9.1-104(a)(3) has priority over a security interest held
by the bank with which the deposit account is maintained.
As added by P.L.57-2000, SEC.45.
IC 26-1-9.1-328
Priority of security interests in investment property
Sec. 328. The following rules govern priority among conflicting
security interests in the same investment property:
(1) A security interest held by a secured party having control of
investment property under IC 26-1-9.1-106 has priority over a
security interest held by a secured party that does not have
control of the investment property.
(2) Except as otherwise provided in subdivisions (3) and (4),
conflicting security interests held by secured parties each of
which has control under IC 26-1-9.1-106 rank according to
priority in time of:
(A) if the collateral is a security, obtaining control;
(B) if the collateral is a security entitlement carried in a
securities account and:
(i) if the secured party obtained control under
IC 26-1-8.1-106(d)(1), the secured party's becoming the
person for which the securities account is maintained;
(ii) if the secured party obtained control under
IC 26-1-8.1-106(d)(2), the securities intermediary's
agreement to comply with the secured party's entitlement
orders with respect to security entitlements carried or to be
carried in the securities account; or
(iii) if the secured party obtained control through another
person under IC 26-1-8.1-106(d)(3), the time on which
priority would be based under this subdivision if the other
person were the secured party; or
(C) if the collateral is a commodity contract carried with a
commodity intermediary, the satisfaction of the requirement
for control specified in IC 26-1-9.1-106(b)(2) with respect to
commodity contracts carried or to be carried with the
commodity intermediary.
(3) A security interest held by a securities intermediary in a
security entitlement or a securities account maintained with the
securities intermediary has priority over a conflicting security
interest held by another secured party.
(4) A security interest held by a commodity intermediary in a
commodity contract or a commodity account maintained with
the commodity intermediary has priority over a conflicting
security interest held by another secured party.
(5) A security interest in a certificated security in registered
form which is perfected by taking delivery under
IC 26-1-9.1-313(a) and not by control under IC 26-1-9.1-314
has priority over a conflicting security interest perfected by a
method other than control.
(6) Conflicting security interests created by a broker, securities
intermediary, or commodity intermediary, which are perfected
without control under IC 26-1-9.1-106 rank equally.
(7) In all other cases, priority among conflicting security
interests in investment property is governed by IC 26-1-9.1-322
and IC 26-1-9.1-323.
As added by P.L.57-2000, SEC.45.
IC 26-1-9.1-330
Priority of purchases of chattel paper or instrument
Sec. 330. (a) A purchaser of chattel paper has priority over a
security interest in the chattel paper which is claimed merely as
proceeds of inventory subject to a security interest if:
(1) in good faith and in the ordinary course of the purchaser's
business, the purchaser gives new value and takes possession of
the chattel paper or obtains control of the chattel paper under
IC 26-1-9.1-105; and
(2) the chattel paper does not indicate that it has been assigned
to an identified assignee other than the purchaser.
(b) A purchaser of chattel paper has priority over a security
interest in the chattel paper which is claimed other than merely as
proceeds of inventory subject to a security interest if the purchaser
gives new value and takes possession of the chattel paper or obtains
control of the chattel paper under IC 26-1-9.1-105 in good faith, in
the ordinary course of the purchaser's business, and without
knowledge that the purchase violates the rights of the secured party.
(c) Except as otherwise provided in IC 26-1-9.1-327, a purchaser
having priority in chattel paper under subsection (a) or (b) also has
priority in proceeds of the chattel paper to the extent that:
(1) IC 26-1-9.1-322 provides for priority in the proceeds; or
(2) the proceeds consist of the specific goods covered by the
chattel paper or cash proceeds of the specific goods, even if the
purchaser's security interest in the proceeds is unperfected.
(d) Except as otherwise provided in IC 26-1-9.1-331(a), a
purchaser of an instrument has priority over a security interest in the
instrument perfected by a method other than possession if the
purchaser gives value and takes possession of the instrument in good
faith and without knowledge that the purchase violates the rights of
the secured party.
(e) For purposes of subsections (a) and (b), the holder of a
purchase-money security interest in inventory gives new value for
chattel paper constituting proceeds of the inventory.
(f) For purposes of subsections (b) and (d), if chattel paper or an
instrument indicates that it has been assigned to an identified secured
party other than the purchaser, a purchaser of the chattel paper or
instrument has knowledge that the purchase violates the rights of the
secured party.
As added by P.L.57-2000, SEC.45.
IC 26-1-9.1-331
Priority of rights of purchasers of instruments, documents, and
securities under other chapters; priority of interests in financial
assets and security entitlements under IC 26-1-8.1
Sec. 331. (a) This article does not limit the rights of a holder in
due course of a negotiable instrument, a holder to which a negotiable
document of title has been duly negotiated, or a protected purchaser
of a security. These holders or purchasers take priority over an earlier
security interest, even if perfected, to the extent provided in
IC 26-1-3.1, IC 26-1-7, and IC 26-1-8.1.
(b) This article does not limit the rights of or impose liability on
a person to the extent that the person is protected against the
assertion of an adverse claim under IC 26-1-8.1.
(c) Filing under IC 26-1-9.1 does not constitute notice of a claim
or defense to the holders, purchasers, or persons described in
subsections (a) and (b).
As added by P.L.57-2000, SEC.45.
IC 26-1-9.1-332
Transfer of money; transfer of funds from deposit account
Sec. 332. (a) A transferee of money takes the money free of a
security interest unless the transferee acts in collusion with the
debtor in violating the rights of the secured party.
(b) A transferee of funds from a deposit account takes the funds
free of a security interest in the deposit account unless the transferee
acts in collusion with the debtor in violating the rights of the secured
party.
As added by P.L.57-2000, SEC.45.
IC 26-1-9.1-333
Priority of certain liens arising by operation of law
Sec. 333. (a) In this section, "possessory lien" means an interest,
other than a security interest or an agricultural lien:
(1) that secures payment or performance of an obligation for
services or materials furnished with respect to goods by a
person in the ordinary course of the person's business;
(2) that is created by statute or rule of law in favor of the
person; and
(3) whose effectiveness depends on the person's possession of
the goods.
(b) A possessory lien on goods has priority over a security interest
in the goods unless the lien is created by a statute that expressly
provides otherwise.
As added by P.L.57-2000, SEC.45.
IC 26-1-9.1-335
Accessions
Sec. 335. (a) A security interest may be created in an accession
and continues in collateral that becomes an accession.
(b) If a security interest is perfected when the collateral becomes
an accession, the security interest remains perfected in the collateral.
(c) Except as otherwise provided in subsection (d), the other
provisions of IC 26-1-9.1-301 through IC 26-1-9.1-342 determine the
priority of a security interest in an accession.
(d) A security interest in an accession is subordinate to a security
interest in the whole which is perfected by compliance with the
requirements of a certificate-of-title statute under IC 26-1-9.1-311(b).
(e) After default, subject to IC 26-1-9.1-601 through
IC 26-1-9.1-628, a secured party may remove an accession from
other goods if the security interest in the accession has priority over
the claims of every person having an interest in the whole.
(f) A secured party that removes an accession from other goods
under subsection (e) shall promptly reimburse any holder of a
security interest or other lien on, or owner, of the whole or the other
goods, other than the debtor, for the cost of repair of any physical
injury to the whole or the other goods. The secured party need not
reimburse the holder or owner for any diminution in value of the
whole or the other goods caused by the absence of the accession
removed or by any necessity for replacing it. A person entitled to
reimbursement may refuse permission to remove until the secured
party gives adequate assurance for the performance of the obligation
to reimburse.
As added by P.L.57-2000, SEC.45. Amended by P.L.165-2001,
SEC.9.
IC 26-1-9.1-336
Commingled goods
Sec. 336. (a) As used in this section, "commingled goods" means
goods that are physically united with other goods in such a manner
that their identity is lost in a product or mass.
(b) A security interest does not exist in commingled goods as
such. However, a security interest may attach to a product or mass
that results when goods become commingled goods.
(c) If collateral becomes commingled goods, a security interest
attaches to the product or mass.
(d) If a security interest in collateral is perfected before the
collateral becomes commingled goods, the security interest that
attaches to the product or mass under subsection (c) is perfected.
(e) Except as otherwise provided in subsection (f), the other
provisions of IC 26-1-9.1-301 through IC 26-1-9.1-342 determine the
priority of a security interest that attaches to the product or mass
under subsection (c).
(f) If more than one (1) security interest attaches to the product or
mass under subsection (c), the following rules determine priority:
(1) A security interest that is perfected under subsection (d) has
priority over a security interest that is unperfected at the time
the collateral becomes commingled goods.
(2) If more than one (1) security interest is perfected under
subsection (d), the security interests rank equally in proportion
to value of the collateral at the time it became commingled
goods.
As added by P.L.57-2000, SEC.45.
IC 26-1-9.1-337
Priority of security interests in goods covered by certificate of title
Sec. 337. If, while a security interest in goods is perfected by any
method under the law of another jurisdiction, this state issues a
certificate of title that does not show that the goods are subject to the
security interest or contain a statement that they may be subject to
security interests not shown on the certificate:
(1) a buyer of the goods, other than a person in the business of
selling goods of that kind, takes free of the security interest if
the buyer gives value and receives delivery of the goods after
issuance of the certificate and without knowledge of the
security interest; and
(2) the security interest is subordinate to a conflicting security
interest in the goods that attaches, and is perfected under
IC 26-1-9.1-311(b), after issuance of the certificate and without
the conflicting secured party's knowledge of the security
interest.
As added by P.L.57-2000, SEC.45.
IC 26-1-9.1-339
Priority subject to subordination
Sec. 339. IC 26-1-9.1 does not preclude subordination by
agreement by a person entitled to priority.
As added by P.L.57-2000, SEC.45.
IC 26-1-9.1-340
Effectiveness of right of recoupment or setoff against deposit
account
Sec. 340. (a) Except as otherwise provided in subsection (c), a
bank with which a deposit account is maintained may exercise any
right of recoupment or set-off against a secured party that holds a
security interest in the deposit account.
(b) Except as otherwise provided in subsection (c), the application
of IC 26-1-9.1 to a security interest in a deposit account does not
affect a right of recoupment or set-off of the secured party as to a
deposit account maintained with the secured party.
(c) The exercise by a bank of a set-off against a deposit account
is ineffective against a secured party that holds a security interest in
the deposit account which is perfected by control under
IC 26-1-9.1-104(a)(3), if the set-off is based on a claim against the
debtor.
As added by P.L.57-2000, SEC.45.
IC 26-1-9.1-341
Bank's rights and duties with respect to deposit account
Sec. 341. Except as otherwise provided in IC 26-1-9.1-340(c), and
unless the bank otherwise agrees in an authenticated record, a bank's
rights and duties with respect to a deposit account maintained with
the bank are not terminated, suspended, or modified by:
IC 26-1-9.1-342
Bank's right to refuse to enter into or disclose existence of control
agreement
Sec. 342. IC 26-1-9.1 does not require a bank to enter into an
agreement of the kind described in IC 26-1-9.1-104(a)(2), even if its
customer so requests or directs. A bank that has entered into such an
agreement is not required to confirm the existence of the agreement
to another person unless requested to do so by its customer.
As added by P.L.57-2000, SEC.45.
IC 26-1-9.1-401
Alienability of debtor's rights
Sec. 401. (a) Except as otherwise provided in subsection (b) and
IC 26-1-9.1-406, IC 26-1-9.1-407, IC 26-1-9.1-408, and
IC 26-1-9.1-409, whether a debtor's rights in collateral may be
voluntarily or involuntarily transferred is governed by law other than
IC 26-1-9.1.
(b) An agreement between the debtor and secured party that
prohibits a transfer of the debtor's rights in collateral or makes the
transfer a default does not prevent the transfer from taking effect.
As added by P.L.57-2000, SEC.45.
IC 26-1-9.1-402
Secured party not obligated on contract of debtor or in tort
Sec. 402. The existence of a security interest, agricultural lien, or
authority given to a debtor to dispose of or use collateral, without
more, does not subject a secured party to liability in contract or tort
for the debtor's acts or omissions.
As added by P.L.57-2000, SEC.45.
IC 26-1-9.1-403
Agreement not to assert defenses against assignee
Sec. 403. (a) As used in this section, "value" has the meaning
provided in IC 26-1-3-303(a).
(b) Except as otherwise provided in this section, an agreement
between an account debtor and an assignor not to assert against an
assignee any claim or defense that the account debtor may have
against the assignor is enforceable by an assignee that takes an
assignment:
(1) for value;
(2) in good faith;
(3) without notice of a claim of a property or possessory right
to the property assigned; and
(4) without notice of a defense or claim in recoupment of the
type that may be asserted against a person entitled to enforce a
negotiable instrument under IC 26-1-3.1-305(a).
(c) Subsection (b) does not apply to defenses of a type that may
be asserted against a holder in due course of a negotiable instrument
under IC 26-1-3.1-305(b).
(d) In a consumer transaction, if a record evidences the account
debtor's obligation, law other than IC 26-1-9.1 requires that the
record include a statement to the effect that the rights of an assignee
are subject to claims or defenses that the account debtor could assert
against the original obligee, and the record does not include such a
statement:
(1) the record has the same effect as if the record included such
a statement; and
(2) the account debtor may assert against an assignee those
claims and defenses that would have been available if the
record included such a statement.
(e) This section is subject to law other than IC 26-1-9.1 that
establishes a different rule for an account debtor who is an individual
and who incurred the obligation primarily for personal, family, or
household purposes.
(f) Except as otherwise provided in subsection (d), this section
does not displace law other than IC 26-1-9.1 which gives effect to an
agreement by an account debtor not to assert a claim or defense
against an assignee.
As added by P.L.57-2000, SEC.45.
IC 26-1-9.1-404
Rights acquired by assignee; claims and defenses against assignee
Sec. 404. (a) Unless an account debtor has made an enforceable
agreement not to assert defenses or claims, and subject to subsections
(b) through (e), the rights of an assignee are subject to:
(1) all terms of the agreement between the account debtor and
assignor and any defense or claim in recoupment arising from
the transaction that gave rise to the contract; and
(2) any other defense or claim of the account debtor against the
assignor which accrues before the account debtor receives a
notification of the assignment authenticated by the assignor or
the assignee.
(b) Subject to subsection (c) and except as otherwise provided in
subsection (d), the claim of an account debtor against an assignor
may be asserted against an assignee under subsection (a) only to
reduce the amount the account debtor owes.
(c) This section is subject to law other than IC 26-1-9.1 that
establishes a different rule for an account debtor who is an individual
and who incurred the obligation primarily for personal, family, or
household purposes.
(d) In a consumer transaction, if a record evidences the account
debtor's obligation, law other than IC 26-1-9.1 requires that the
record include a statement to the effect that the account debtor's
recovery against an assignee with respect to claims and defenses
against the assignor may not exceed amounts paid by the account
debtor under the record, and the record does not include such a
statement, the extent to which a claim of an account debtor against
the assignor may be asserted against an assignee is determined as if
the record included such a statement.
(e) This section does not apply to an assignment of a
health-care-insurance receivable.
As added by P.L.57-2000, SEC.45.
IC 26-1-9.1-405
Modification of assigned contract
Sec. 405. (a) A modification of or substitution for an assigned
contract is effective against an assignee if made in good faith. The
assignee acquires corresponding rights under the modified or
substituted contract. The assignment may provide that the
modification or substitution is a breach of contract by the assignor.
This subsection is subject to subsections (b) through (d).
(b) Subsection (a) applies to the extent that:
(1) the right to payment or a part thereof under an assigned
contract has not been fully earned by performance; or
(2) the right to payment or a part thereof has been fully earned
by performance and the account debtor has not received
notification of the assignment under IC 26-1-9.1-406(a).
(c) This section is subject to law other than IC 26-1-9.1 that
establishes a different rule for an account debtor who is an individual
and who incurred the obligation primarily for personal, family, or
household purposes.
(d) This section does not apply to an assignment of a
health-care-insurance receivable.
As added by P.L.57-2000, SEC.45.
IC 26-1-9.1-406 Version a
Discharge of account debtor; notification of assignment;
identification and proof of assignment; restrictions on assignment
of accounts, chattel paper, payment intangibles, and promissory
notes ineffective
Note: This version of section effective until 7-1-2013. See also
following version of this section, effective 7-1-2013.
Sec. 406. (a) Subject to subsections (b) through (i), an account
debtor on an account, chattel paper, or a payment intangible may
discharge its obligation by paying the assignor until, but not after, the
account debtor receives a notification, authenticated by the assignor
or the assignee, that the amount due or to become due has been
assigned and that payment is to be made to the assignee. After receipt
of the notification, the account debtor may discharge its obligation
by paying the assignee and may not discharge the obligation by
paying the assignor.
(b) Subject to subsection (h), notification is ineffective under
subsection (a):
(1) if it does not reasonably identify the rights assigned;
or chattel paper.
(g) Subject to subsection (h), an account debtor may not waive or
vary its option under subsection (b)(3).
(h) This section is subject to law other than IC 26-1-9.1 which
establishes a different rule for an account debtor who is an individual
and who incurred the obligation primarily for personal, family, or
household purposes.
(i) This section does not apply to an assignment of a
health-care-insurance receivable.
As added by P.L.57-2000, SEC.45.
IC 26-1-9.1-406 Version b
Discharge of account debtor; notification of assignment;
identification and proof of assignment; restrictions on assignment
of accounts, chattel paper, payment intangibles, and promissory
notes ineffective
Note: This version of section effective 7-1-2013. See also
preceding version of this section, effective until 7-1-2013.
Sec. 406. (a) Subject to subsections (b) through (i), an account
debtor on an account, chattel paper, or a payment intangible may
discharge its obligation by paying the assignor until, but not after, the
account debtor receives a notification, authenticated by the assignor
or the assignee, that the amount due or to become due has been
assigned and that payment is to be made to the assignee. After receipt
of the notification, the account debtor may discharge its obligation
by paying the assignee and may not discharge the obligation by
paying the assignor.
(b) Subject to subsection (h), notification is ineffective under
subsection (a):
(1) if it does not reasonably identify the rights assigned;
(2) to the extent that an agreement between an account debtor
and a seller of a payment intangible limits the account debtor's
duty to pay a person other than the seller and the limitation is
effective under law other than IC 26-1-9.1; or
(3) at the option of an account debtor, if the notification notifies
the account debtor to make less than the full amount of any
installment or other periodic payment to the assignee, even if:
(A) only a portion of the account, chattel paper, or payment
intangible has been assigned to that assignee;
(B) a portion has been assigned to another assignee; or
(C) the account debtor knows that the assignment to that
assignee is limited.
(c) Subject to subsection (h), if requested by the account debtor,
an assignee shall seasonably furnish reasonable proof that the
assignment has been made. Unless the assignee complies, the
account debtor may discharge its obligation by paying the assignor,
even if the account debtor has received a notification under
subsection (a).
(d) Except as otherwise provided in subsection (e) and
IC 26-1-2.1-303 and IC 26-1-9.1-407, and subject to subsection (h),
a term in an agreement between an account debtor and an assignor or
in a promissory note is ineffective to the extent that it:
(1) prohibits, restricts, or requires the consent of the account
debtor or person obligated on the promissory note to the
assignment or transfer of, or the creation, attachment,
perfection, or enforcement of a security interest in, the account,
chattel paper, payment intangible, or promissory note; or
(2) provides that the assignment or transfer or the creation,
attachment, perfection, or enforcement of the security interest
may give rise to a default, breach, right of recoupment, claim,
defense, termination, right of termination, or remedy under the
account, chattel paper, payment intangible, or promissory note.
(e) Subsection (d) does not apply to the sale of a payment
intangible or promissory note other than a sale pursuant to a
disposition under IC 26-1-9.1-610 or an acceptance of collateral
under IC 26-1-9.1-620.
(f) Except as provided in IC 26-1-2.1-303 and IC 26-1-9.1-407,
and subject to subsections (h) and (i), a rule of law, statute, or
regulation that prohibits, restricts, or requires the consent of a
government, governmental body or official, or account debtor to the
assignment or transfer of, or creation of a security interest in, an
account or chattel paper is ineffective to the extent that the rule of
law, statute, or regulation:
(1) prohibits, restricts, or requires the consent of the
government, governmental body or official, or account debtor
to the assignment or transfer of, or the creation, attachment,
perfection, or enforcement of a security interest in the account
or chattel paper; or
(2) provides that the assignment or transfer or the creation,
attachment, perfection, or enforcement of the security interest
may give rise to a default, right of recoupment, claim, defense,
termination, right of termination, or remedy under the account
or chattel paper.
(g) Subject to subsection (h), an account debtor may not waive or
vary its option under subsection (b)(3).
(h) This section is subject to law other than IC 26-1-9.1 which
establishes a different rule for an account debtor who is an individual
and who incurred the obligation primarily for personal, family, or
household purposes.
(i) This section does not apply to an assignment of a
health-care-insurance receivable.
As added by P.L.57-2000, SEC.45. Amended by P.L.54-2011,
SEC.10.
IC 26-1-9.1-407
Restrictions on creation or enforcement of security interest in
leasehold interest or in lessor's residual interest
Sec. 407. (a) Except as otherwise provided in subsection (b), a
term in a lease agreement is ineffective to the extent that it:
(1) prohibits, restricts, or requires the consent of a party to the
lease to the assignment, transfer, creation, attachment,
perfection, or enforcement of a security interest in an interest of
a party under the lease contract or in the lessor's residual
interest in the goods; or
(2) provides that the assignment, transfer, creation, attachment,
perfection, or enforcement of the security interest may give rise
to a default, breach, right of recoupment, claim, defense,
termination, right of termination, or remedy under the lease.
(b) Except as otherwise provided in IC 26-1-2.1-303(7), a term
described in subsection (a)(2) is effective to the extent that there is:
(1) a transfer by the lessee of the lessee's right of possession or
use of the goods in violation of the term; or
(2) a delegation of a material performance of either party to the
lease contract in violation of the term.
(c) The creation, attachment, perfection, or enforcement of a
security interest in the lessor's interest under the lease contract or the
lessor's residual interest in the goods is not a transfer that materially
impairs the lessee's prospect of obtaining return performance or
materially changes the duty of or materially increases the burden or
risk imposed on the lessee within the purview of IC 26-1-2.1-303(4)
unless, and then only to the extent that, enforcement actually results
in a delegation of material performance of the lessor.
As added by P.L.57-2000, SEC.45.
IC 26-1-9.1-408 Version a
Restrictions on assignment of promissory notes, health care
insurance receivables, and certain general intangibles ineffective
Note: This version of section effective until 7-1-2013. See also
following version of this section, effective 7-1-2013.
Sec. 408. (a) Except as otherwise provided in subsection (b), a
term in a promissory note or in an agreement between an account
debtor and a debtor that relates to a health-care-insurance receivable
or a general intangible, including a contract, permit, license, or
franchise, and which term prohibits, restricts, or requires the consent
of the person obligated on the promissory note or the account debtor
to, the assignment or transfer of, or creation, attachment, or
perfection of a security interest in, the promissory note,
health-care-insurance receivable, or general intangible, is ineffective
to the extent that the term:
(1) would impair the creation, attachment, or perfection of a
security interest; or
(2) provides that the assignment, transfer, creation, attachment,
or perfection of the security interest may give rise to a default,
breach, right of recoupment, claim, defense, termination, right
of termination, or remedy under the promissory note,
health-care-insurance receivable, or general intangible.
(b) Subsection (a) applies to a security interest in a payment
intangible or promissory note only if the security interest arises out
of a sale of the payment intangible or promissory note.
(c) A rule of law, statute, or regulation, which prohibits, restricts,
or requires the consent of a government, governmental body or
official, person obligated on a promissory note, or account debtor to
the assignment or transfer of, or creation of a security interest in, a
promissory note, health-care-insurance receivable, or general
intangible, including a contract, permit, license, or franchise between
an account debtor and a debtor, is ineffective to the extent that the
rule of law, statute, or regulation:
(1) would impair the creation, attachment, or perfection of a
security interest; or
(2) provides that the assignment, transfer, creation, attachment,
or perfection of the security interest may give rise to a default,
breach, right of recoupment, claim, defense, termination, right
of termination, or remedy under the promissory note,
health-care-insurance receivable, or general intangible.
(d) To the extent that a term in a promissory note or in an
agreement between an account debtor and a debtor which relates to
a health-care-insurance receivable or general intangible or a rule of
law, statute, or regulation described in subsection (c) would be
effective under law other than IC 26-1-9.1 but is ineffective under
subsection (a) or (c), the creation, attachment, or perfection of a
security interest in the promissory note, health-care-insurance
receivable, or general intangible:
(1) is not enforceable against the person obligated on the
promissory note or the account debtor;
(2) does not impose a duty or obligation on the person obligated
on the promissory note or the account debtor;
(3) does not require the person obligated on the promissory note
or the account debtor to recognize the security interest, pay or
render performance to the secured party, or accept payment or
performance from the secured party;
(4) does not entitle the secured party to use or assign the
debtor's rights under the promissory note, health-care-insurance
receivable, or general intangible, including any related
information or materials furnished to the debtor in the
transaction giving rise to the promissory note,
health-care-insurance receivable, or general intangible;
(5) does not entitle the secured party to use, assign, possess, or
have access to any trade secrets or confidential information of
the person obligated on the promissory note or the account
debtor; and
(6) does not entitle the secured party to enforce the security
interest in the promissory note, health-care-insurance
receivable, or general intangible.
(e) This section prevails over any inconsistent provision in statute,
administrative rule, or regulation.
As added by P.L.57-2000, SEC.45. Amended by P.L.165-2001,
SEC.10.
IC 26-1-9.1-408 Version b
Restrictions on assignment of promissory notes, health care
insurance receivables, and certain general intangibles ineffective
Note: This version of section effective 7-1-2013. See also
preceding version of this section, effective until 7-1-2013.
Sec. 408. (a) Except as otherwise provided in subsection (b), a
term in a promissory note or in an agreement between an account
debtor and a debtor that relates to a health-care-insurance receivable
or a general intangible, including a contract, permit, license, or
franchise, and which term prohibits, restricts, or requires the consent
of the person obligated on the promissory note or the account debtor
to, the assignment or transfer of, or creation, attachment, or
perfection of a security interest in, the promissory note,
health-care-insurance receivable, or general intangible, is ineffective
to the extent that the term:
(1) would impair the creation, attachment, or perfection of a
security interest; or
(2) provides that the assignment, transfer, creation, attachment,
or perfection of the security interest may give rise to a default,
breach, right of recoupment, claim, defense, termination, right
of termination, or remedy under the promissory note,
health-care-insurance receivable, or general intangible.
(b) Subsection (a) applies to a security interest in a payment
intangible or promissory note only if the security interest arises out
of a sale of the payment intangible or promissory note other than a
sale under a disposition under IC 26-1-9.1-610 or an acceptance of
collateral under IC 26-1-9.1-620.
(c) A rule of law, statute, or regulation, which prohibits, restricts,
or requires the consent of a government, governmental body or
official, person obligated on a promissory note, or account debtor to
the assignment or transfer of, or creation of a security interest in, a
promissory note, health-care-insurance receivable, or general
intangible, including a contract, permit, license, or franchise between
an account debtor and a debtor, is ineffective to the extent that the
rule of law, statute, or regulation:
(1) would impair the creation, attachment, or perfection of a
security interest; or
(2) provides that the assignment, transfer, creation, attachment,
or perfection of the security interest may give rise to a default,
breach, right of recoupment, claim, defense, termination, right
of termination, or remedy under the promissory note,
health-care-insurance receivable, or general intangible.
(d) To the extent that a term in a promissory note or in an
agreement between an account debtor and a debtor which relates to
a health-care-insurance receivable or general intangible or a rule of
law, statute, or regulation described in subsection (c) would be
effective under law other than IC 26-1-9.1 but is ineffective under
subsection (a) or (c), the creation, attachment, or perfection of a
security interest in the promissory note, health-care-insurance
receivable, or general intangible:
(1) is not enforceable against the person obligated on the
promissory note or the account debtor;
IC 26-1-9.1-409
Restrictions on assignment of letter-of-credit rights ineffective
Sec. 409. (a) A term in a letter-of-credit or a rule of law, statute,
regulation, custom, or practice applicable to the letter-of-credit that
prohibits, restricts, or requires the consent of an applicant, issuer, or
nominated person to a beneficiary's assignment of or creation of a
security interest in a letter-of-credit right is ineffective to the extent
that the term or rule of law, statute, regulation, custom, or practice:
(1) would impair the creation, attachment, or perfection of a
security interest in the letter-of-credit right; or
(2) provides that the assignment, transfer, creation, attachment,
or perfection of the security interest may give rise to a default,
breach, right of recoupment, claim, defense, termination, right
of termination, or remedy under the letter-of-credit right.
(b) To the extent that a term in a letter-of-credit is ineffective
under subsection (a) but would be effective under law other than
IC 26-1-9.1 or a custom or practice applicable to the letter-of-credit,
to the transfer of a right to draw or otherwise demand performance
under the letter-of-credit, or to the assignment of a right to proceeds
of the letter-of-credit, the creation, attachment, or perfection of a
security interest in the letter-of-credit right:
(1) is not enforceable against the applicant, issuer, nominated
person, or transferee beneficiary;
(2) imposes no duties or obligations on the applicant, issuer,
nominated person, or transferee beneficiary; and
(3) does not require the applicant, issuer, nominated person, or
transferee beneficiary to recognize the security interest, pay or
render performance to the secured party, or accept payment or
other performance from the secured party.
As added by P.L.57-2000, SEC.45.
IC 26-1-9.1-501
Filing office
Sec. 501. (a) Except as otherwise provided in subsections (b), (c),
and (d), if the local law of this state governs perfection of a security
interest or agricultural lien, the office in which to file a financing
statement to perfect the security interest or agricultural lien is:
(1) the office designated for the filing or recording of a record
of a mortgage on the related real property, if:
(A) the collateral is as-extracted collateral or timber to be
cut; or
(B) the financing statement is filed as a fixture filing and the
collateral is goods that are or are to become fixtures; or
(2) the office of the secretary of state, in all other cases,
including a case in which the collateral is goods that are or are
to become fixtures and the financing statement is not filed as a
fixture filing.
(b) The office in which to file a financing statement to perfect a
security interest in collateral, including fixtures, of a transmitting
utility is the office of the secretary of state. The financing statement
also constitutes a fixture filing as to the collateral indicated in the
financing statement which is or is to become fixtures.
(c) Before July 1, 2002, the requirements for perfection of an
agricultural lien are as prescribed in the statute establishing the
agricultural lien.
(d) Before July 1, 2002, the office in which to file a financing
statement to perfect a security interest in equipment used in a
farming operation, a farm product, or an account or a general
intangible arising from or relating to the sale of a farm product by a
farmer is:
(1) the office of the county recorder in the county of the debtor's
principal residence, if the debtor is an individual with the
debtor's principal residence in Indiana;
(2) the office of the county recorder in the county of the debtor's
place of business, if the debtor is an organization with one (1)
place of business in Indiana;
(3) the office of the county recorder in the county of the debtor's
chief executive office, if the debtor is an organization with two
(2) or more places of business in Indiana and the debtor's chief
executive office is in Indiana; and
(4) the office of the county recorder in the county in which the
collateral is located, for equipment used in a farming operation
or farm product, or the office of the secretary of state, for an
account or a general intangible arising from or relating to the
sale of a farm product by a farmer, in all other cases.
(e) A financing statement filed under subsection (d) is effective
for five (5) years after the date the financing statement is filed.
(f) After June 30, 2001, and before July 1, 2002, a financing
statement filed under subsection (d) may be amended only by filing
an amendment in the same office of county recorder as the office in
which the financing statement being amended was filed.
(g) After June 30, 2002, a financing statement filed under
subsection (d) may be amended only if a replacement financing
statement is filed in the office of the secretary of state. The
replacement financing statement must:
(1) satisfy the requirements of IC 26-1-9.1 for an initial
financing statement;
(2) identify the earlier financing statement filed under
subsection (d) by:
(A) indicating the office in which the earlier financing
statement was filed; and
(B) providing the dates of filing and file numbers, if any, of:
(i) the earlier financing statement filed under subsection
(d); and
(ii) the most recent amendment filed with respect to the
financing statement filed under subsection (d); and
(3) indicate that the earlier financing statement filed under
subsection (d) remains effective.
(h) The filing of a replacement financing statement under
subsection (g) is effective as a continuation statement of the earlier
financing statement filed under subsection (d) if it is filed:
(1) after June 30, 2002; and
(2) before the lapse of the earlier financing statement filed
under subsection (d).
The filing of a replacement financing statement under subsection (g)
continues the effectiveness of the earlier financing statement filed
under subsection (d) for five (5) years after the date the replacement
financing statement is filed.
(i) After June 30, 2002, a financing statement filed under
subsection (d) may be terminated:
(1) by filing a termination statement in the office in which the
initial financing statement has been filed if no replacement
financing statement has been filed under subsection (g); or
(2) by filing a termination statement in the office of the
secretary of state if a replacement financing statement has been
filed under subsection (g).
(j) After June 30, 2002, a financing statement filed under
subsection (d) may be assigned only if:
(1) a replacement financing statement is filed under subsection
(g); and
(2) an assignment of record is filed that satisfies
IC 26-1-9.1-514.
(k) After June 30, 2002, a financing statement filed under
subsection (c) may be amended (for purposes other than
continuation, termination, or assignment) only if:
(1) a replacement financing statement is filed under subsection
(g); and
(2) an amendment is filed that satisfies IC 26-1-9.1-512.
As added by P.L.57-2000, SEC.45. Amended by P.L.165-2001,
SEC.11.
IC 26-1-9.1-502 Version a
Contents of financing statement; record of mortgage as financing
statement; time of filing financing statement
Note: This version of section effective until 7-1-2013. See also
following version of this section, effective 7-1-2013.
Sec. 502. (a) Subject to subsection (b), a financing statement is
sufficient only if it:
(1) provides the name of the debtor;
(2) provides the name of the secured party or a representative of
the secured party; and
(3) indicates the collateral covered by the financing statement.
(b) Except as otherwise provided in IC 26-1-9.1-501(b), to be
sufficient, a financing statement that covers as-extracted collateral or
timber to be cut, or which is filed as a fixture filing and covers goods
that are or are to become fixtures, must satisfy subsection (a) and
also:
(1) indicate that it covers this type of collateral;
(2) indicate that it is to be filed in the real property records;
(3) provide a description of the real property to which the
collateral is related that is sufficient to give constructive notice
of a mortgage under the law of this state if the description were
contained in a record of the mortgage of the real property; and
(4) if the debtor does not have an interest of record in the real
property, provide the name of a record owner.
(c) A record of a mortgage is effective, from the date of recording,
as a financing statement filed as a fixture filing or as a financing
statement covering as-extracted collateral or timber to be cut only if:
(1) the record indicates the goods or accounts that it covers;
(2) the goods are or are to become fixtures related to the real
property described in the record or the collateral is related to the
real property described in the record and is as-extracted
collateral or timber to be cut;
(3) the record satisfies the requirements for a financing
statement in this section other than an indication that it is to be
filed in the real property records; and
(4) the record is recorded.
(d) A financing statement may be filed before a security
agreement is made or a security interest otherwise attaches.
(e) To the extent that IC 36-2-11-15 applies to require the
identification of the preparer of a financing statement, the failure of
the financing statement to identify the preparer does not affect the
sufficiency of the financing statement.
(f) This subsection does not apply to a financing statement
described in IC 26-1-9.1-706. Not later than thirty (30) days after the
date the financing statement is filed, the secured party that files the
financing statement shall furnish a copy of the financing statement
to the debtor. The secured party has the burden of establishing
compliance with this subsection. The failure of the secured party to
comply with this subsection does not affect the sufficiency or
effectiveness of the financing statement. A person who fails to
comply with this subsection is subject to IC 26-1-9.1-625.
As added by P.L.57-2000, SEC.45. Amended by P.L.165-2001,
SEC.12.
IC 26-1-9.1-502 Version b
Contents of financing statement; record of mortgage as financing
statement; time of filing financing statement
Note: This version of section effective 7-1-2013. See also
preceding version of this section, effective until 7-1-2013.
Sec. 502. (a) Subject to subsection (b), a financing statement is
sufficient only if it:
(1) provides the name of the debtor;
(2) provides the name of the secured party or a representative of
the secured party; and
(3) indicates the collateral covered by the financing statement.
(b) Except as otherwise provided in IC 26-1-9.1-501(b), to be
sufficient, a financing statement that covers as-extracted collateral or
timber to be cut, or which is filed as a fixture filing and covers goods
that are or are to become fixtures, must satisfy subsection (a) and
also:
(1) indicate that it covers this type of collateral;
(2) indicate that it is to be filed in the real property records;
(3) provide a description of the real property to which the
collateral is related that is sufficient to give constructive notice
of a mortgage under the law of this state if the description were
contained in a record of the mortgage of the real property; and
(4) if the debtor does not have an interest of record in the real
property, provide the name of a record owner.
(c) A record of a mortgage is effective, from the date of recording,
as a financing statement filed as a fixture filing or as a financing
statement covering as-extracted collateral or timber to be cut only if:
(1) the record indicates the goods or accounts that it covers;
(2) the goods are or are to become fixtures related to the real
property described in the record or the collateral is related to the
real property described in the record and is as-extracted
collateral or timber to be cut;
(3) the record satisfies the requirements for a financing
statement in this section, but:
(A) the record need not indicate that it is to be filed in the
real property records; and
(B) the record sufficiently provides the name of a debtor
who is an individual if it provides the individual name of the
debtor or the surname and first personal name of the debtor,
even if the debtor is an individual to whom
IC 26-1-9.1-503(a)(4) applies; and
IC 26-1-9.1-503 Version a
Name of debtor and secured party
Note: This version of section effective until 7-1-2013. See also
following version of this section, effective 7-1-2013.
Sec. 503. (a) A financing statement sufficiently provides the name
of the debtor:
(1) if the debtor is a registered organization, only if the
financing statement provides the name of the debtor indicated
on the public record of the debtor's jurisdiction of organization
which shows the debtor to have been organized;
(2) if the debtor is a decedent's estate, only if the financing
statement provides the name of the decedent and indicates that
the debtor is an estate;
(3) if the debtor is a trust or a trustee acting with respect to
property held in trust, only if the financing statement:
(A) provides the name specified for the trust in its organic
documents or, if no name is specified, provides the name of
the settlor and additional information sufficient to
distinguish the debtor from other trusts having one (1) or
more of the same settlors; and
(B) indicates, in the debtor's name or otherwise, that the
debtor is a trust or is a trustee acting with respect to property
held in trust; and
(4) in other cases:
(A) if the debtor has a name, only if it provides the
individual or organizational name of the debtor; and
(B) if the debtor does not have a name, only if it provides the
names of the partners, members, associates, or other persons
comprising the debtor.
(b) A financing statement that provides the name of the debtor in
accordance with subsection (a) is not rendered ineffective by the
absence of:
(1) a trade name or other name of the debtor; or
(2) unless required under subsection (a)(4)(B), names of
partners, members, associates, or other persons comprising the
debtor.
(c) A financing statement that provides only the debtor's trade
name does not sufficiently provide the name of the debtor.
(d) Failure to indicate the representative capacity of a secured
party or representative of a secured party does not affect the
sufficiency of a financing statement.
(e) A financing statement may provide the name of more than one
(1) debtor and the name of more than one (1) secured party.
As added by P.L.57-2000, SEC.45.
IC 26-1-9.1-503 Version b
Name of debtor and secured party
Note: This version of section effective 7-1-2013. See also
preceding version of this section, effective until 7-1-2013.
Sec. 503. (a) A financing statement sufficiently provides the name
of the debtor:
(1) except as otherwise provided in subdivision (3), if the
debtor is a registered organization or the collateral is held in a
trust that is a registered organization, only if the financing
statement provides the name that is stated to be the registered
organization's name on the public organic record most recently
filed with or issued or enacted by the registered organization's
jurisdiction of organization which purports to state, amend, or
restate the registered organization's name;
(2) subject to subsection (f), if the collateral is being
administered by the personal representative of a decedent only
if the financing statement provides as the name of the debtor the
name of the decedent, and, in a separate part of the financing
statement, indicates that the collateral is being administered by
a personal representative;
(3) if the collateral is held in a trust that is not a registered
organization, only if the financing statement:
(A) provides as the name of the debtor:
(i) if the organic record of the trust specifies a name for
the trust, the name specified; or
(ii) if the organic record of the trust does not specify a
name for the trust, the name of the settlor or testator; and
(B) in a separate part of the financing statement:
(i) if the name is provided in accordance with clause
(A)(i), indicates that the collateral is held in a trust; or
(ii) if the name is provided in accordance with clause
(A)(ii), provides additional information sufficient to
distinguish the trust from other trusts having one (1) or
more of the same settlors of the same testator and indicates
that the collateral is held in a trust, unless the additional
information so indicates;
IC 26-1-9.1-505
Filing and compliance with other statutes and treaties for
consignments, leases, other bailments, and other transactions
Sec. 505. (a) A consignor, lessor, or other bailor of goods or a
buyer of a payment intangible or a promissory note may file a
financing statement, or may comply with a statute or treaty described
in IC 26-1-9.1-311(a), using the terms "consignor", "consignee",
"lessor", "lessee", "bailor", "bailee", "licensor", "licensee", "owner",
"registered owner", "buyer", "seller", or words of similar import,
instead of the terms "secured party" and "debtor".
(b) IC 26-1-9.1-501 through IC 26-1-9.1-527 apply to the filing of
a financing statement under subsection (a) and, as appropriate, to
compliance that is equivalent to filing a financing statement under
IC 26-1-9.1-311(b), but the filing or compliance is not of itself a
factor in determining whether the collateral secures an obligation. If
it is determined for another reason that the collateral secures an
obligation, a security interest held by the consignor, lessor, bailor,
owner, or buyer which attaches to the collateral is perfected by the
filing or compliance.
As added by P.L.57-2000, SEC.45.
IC 26-1-9.1-506
Effect of errors or omissions
Sec. 506. (a) A financing statement substantially satisfying the
requirements of IC 26-1-9.1-501 through IC 26-1-9.1-527 is
effective, even if it has minor errors or omissions, unless the errors
or omissions make the financing statement seriously misleading.
(b) Except as otherwise provided in subsection (c), a financing
statement that fails sufficiently to provide the name of the debtor in
accordance with IC 26-1-9.1-503(a) is seriously misleading.
(c) If a search of the records of the filing office under the debtor's
correct name, using the filing office's standard search logic, if any,
would disclose a financing statement that fails to sufficiently provide
the name of the debtor in accordance with IC 26-1-9.1-503(a), the
name provided does not make the financing statement seriously
misleading.
(d) For purposes of IC 26-1-9.1-508(b), the "debtor's correct
name" in subsection (c) means the correct name of the new debtor.
As added by P.L.57-2000, SEC.45. Amended by P.L.165-2001,
SEC.13.
IC 26-1-9.1-507 Version b
Effect of certain events on effectiveness of financing statement
Note: This version of section effective 7-1-2013. See also
preceding version of this section, effective until 7-1-2013.
Sec. 507. (a) A filed financing statement remains effective with
respect to collateral that is sold, exchanged, leased, licensed, or
otherwise disposed of and in which a security interest or agricultural
lien continues, even if the secured party knows of or consents to the
disposition.
(b) Except as otherwise provided in subsection (c) and
IC 26-1-9.1-508, a financing statement is not rendered ineffective if,
after the financing statement is filed, the information provided in the
financing statement becomes seriously misleading under
IC 26-1-9.1-506.
(c) If the name that a filed financing statement provides for a
debtor becomes insufficient as the name of the debtor under
IC 26-1-9.1-503(a) so that the financing statement becomes seriously
misleading under IC 26-1-9.1-506:
(1) the financing statement is effective to perfect a security
interest in collateral acquired by the debtor before, or within
four (4) months after, the filed financing statement becomes
seriously misleading; and
(2) the financing statement is not effective to perfect a security
interest in collateral acquired by the debtor more than four (4)
months after the filed financing statement becomes seriously
misleading, unless an amendment to the financing statement
which renders the financing statement not seriously misleading
is filed within four months (4) after the financing statement
became seriously misleading.
As added by P.L.57-2000, SEC.45. Amended by P.L.54-2011,
SEC.14.
IC 26-1-9.1-508
Effectiveness of financing statement if new debtor becomes bound
by security agreement
Sec. 508. (a) Except as otherwise provided in this section, a filed
financing statement naming an original debtor is effective to perfect
a security interest in collateral in which a new debtor has or acquires
rights to the extent that the financing statement would have been
effective had the original debtor acquired rights in the collateral.
(b) If the difference between the name of the original debtor and
that of the new debtor causes a filed financing statement that is
effective under subsection (a) to be seriously misleading under
IC 26-1-9.1-506:
(1) the financing statement is effective to perfect a security
interest in collateral acquired by the new debtor before, and
within four (4) months after, the new debtor becomes bound
under IC 26-1-9.1-203(d); and
(2) the financing statement is not effective to perfect a security
interest in collateral acquired by the new debtor more than four
(4) months after the new debtor becomes bound under
IC 26-1-9.1-203(d) unless an initial financing statement
providing the name of the new debtor is filed before the
expiration of that time.
(c) This section does not apply to collateral as to which a filed
financing statement remains effective against the new debtor under
IC 26-1-9.1-507(a).
As added by P.L.57-2000, SEC.45.
IC 26-1-9.1-509
Persons entitled to file a record
Sec. 509. (a) A person may file an initial financing statement,
amendment that adds collateral covered by a financing statement, or
amendment that adds a debtor to a financing statement only if:
(1) the debtor authorizes the filing in an authenticated record or
under subsection (b) or (c); or
(2) the person holds an agricultural lien that has become
effective at the time of filing and the financing statement covers
only collateral in which the person holds an agricultural lien.
(b) By authenticating or becoming bound as debtor by a security
agreement, a debtor or new debtor authorizes the filing of an initial
financing statement, and an amendment, covering:
(1) the collateral described in the security agreement; and
(2) property that becomes collateral under
IC 26-1-9.1-315(a)(2), whether or not the security agreement
expressly covers proceeds.
(c) By acquiring collateral in which a security interest or
agricultural lien continues under IC 26-1-9.1-315(a)(1), a debtor
authorizes the filing of an initial financing statement, and an
amendment, covering the collateral and property that becomes
collateral under IC 26-1-9.1-315(a)(2).
(d) A person may file an amendment other than an amendment
that adds collateral covered by a financing statement or an
amendment that adds a debtor to a financing statement only if:
(1) the secured party of record authorizes the filing; or
(2) the amendment is a termination statement for a financing
statement as to which the secured party of record has failed to
file or send a termination statement as required by
IC 26-1-9.1-513(a) or IC 26-1-9.1-513(c), the debtor authorizes
the filing, and the termination statement indicates that the
debtor authorized it to be filed.
(e) If there is more than one (1) secured party of record for a
financing statement, each secured party of record may authorize the
filing of an amendment under subsection (d).
As added by P.L.57-2000, SEC.45. Amended by P.L.165-2001,
SEC.14; P.L.1-2010, SEC.108.
IC 26-1-9.1-510
Effectiveness of filed record
Sec. 510. (a) A filed record is effective only to the extent that it
was filed by a person that may file it under IC 26-1-9.1-509.
(b) A record authorized by one secured party of record does not
affect the financing statement with respect to another secured party
of record.
(c) A continuation statement that is not filed within the six (6)
month period prescribed by IC 26-1-9.1-515(d) is ineffective.
As added by P.L.57-2000, SEC.45.
IC 26-1-9.1-511
Secured party of record
Sec. 511. (a) A secured party of record with respect to a financing
statement is a person whose name is provided as the name of the
secured party or a representative of the secured party in an initial
financing statement that has been filed. If an initial financing
statement is filed under IC 26-1-9.1-514(a), the assignee named in
the initial financing statement is the secured party of record with
respect to the financing statement.
(b) If an amendment of a financing statement that provides the
name of a person as a secured party or a representative of a secured
party is filed, the person named in the amendment is a secured party
of record. If an amendment is filed under IC 26-1-9.1-514(b), the
assignee named in the amendment is a secured party of record.
(c) A person remains a secured party of record until the filing of
an amendment of the financing statement that deletes the person.
IC 26-1-9.1-512
Amendment of financing statement
Sec. 512. (a) Subject to IC 26-1-9.1-509, a person may add or
delete collateral covered by, continue or terminate the effectiveness
of, or, subject to subsection (e), otherwise amend the information
provided in, a financing statement by filing an amendment that:
(1) identifies, by its file number, the initial financing statement
to which the amendment relates; and
(2) if the amendment relates to an initial financing statement
filed or recorded in a filing office described in
IC 26-1-9.1-501(a)(1), provides the information specified in
IC 26-1-9.1-502(b).
(b) Except as otherwise provided in IC 26-1-9.1-515, the filing of
an amendment does not extend the period of effectiveness of the
financing statement.
(c) A financing statement that is amended by an amendment that
adds collateral is effective as to the added collateral only from the
date of the filing of the amendment.
(d) A financing statement that is amended by an amendment that
adds a debtor is effective as to the added debtor only from the date
of the filing of the amendment.
(e) An amendment is ineffective to the extent it:
(1) purports to delete all debtors and fails to provide the name
of a debtor to be covered by the financing statement; or
(2) purports to delete all secured parties of record and fails to
provide the name of a new secured party of record.
As added by P.L.57-2000, SEC.45.
IC 26-1-9.1-513
Termination statement
Sec. 513. (a) A secured party shall cause the secured party of
record for a financing statement to file a termination statement for
the financing statement if the financing statement covers consumer
goods and:
(1) there is no obligation secured by the collateral covered by
the financing statement and no commitment to make an
advance, incur an obligation, or otherwise give value; or
(2) the debtor did not authorize the filing of the initial financing
statement.
(b) To comply with subsection (a), a secured party shall cause the
secured party of record to file the termination statement:
(1) within one (1) month after there is no obligation secured by
the collateral covered by the financing statement and no
commitment to make an advance, incur an obligation, or
otherwise give value; or
(2) if earlier, within twenty (20) days after the secured party
receives an authenticated demand from a debtor.
(c) In cases not governed by subsection (a), within twenty (20)
days after a secured party receives an authenticated demand from a
debtor, the secured party shall cause the secured party of record for
a financing statement to send to the debtor a termination statement
for the financing statement or file the termination statement in the
filing office if:
(1) except in the case of a financing statement covering
accounts or chattel paper that has been sold or goods that are
the subject of a consignment, there is no obligation secured by
the collateral covered by the financing statement and no
commitment to make an advance, incur an obligation, or
otherwise give value;
(2) the financing statement covers accounts or chattel paper that
has been sold but as to which the account debtor or other person
obligated has discharged its obligation;
(3) the financing statement covers goods that were the subject
of a consignment to the debtor but are not in the debtor's
possession; or
(4) the debtor did not authorize the filing of the initial financing
statement.
(d) Except as otherwise provided in IC 26-1-9.1-510, upon the
filing of a termination statement with the filing office, the financing
statement to which the termination statement relates ceases to be
effective. Except as otherwise provided in IC 26-1-9.1-510, for
purposes of IC 26-1-9.1-519(g), IC 26-1-9.1-522(a), and
IC 26-1-9.1-523(c), the filing with the filing office of a termination
statement relating to a financing statement that indicates that the
debtor is a transmitting utility also causes the effectiveness of the
financing statement to lapse.
As added by P.L.57-2000, SEC.45.
IC 26-1-9.1-514
Assignment of powers of secured party of record
Sec. 514. (a) Except as otherwise provided in subsection (c), an
initial financing statement may reflect an assignment of all of the
secured party's power to authorize an amendment to the financing
statement by providing the name and mailing address of the assignee
as the name and address of the secured party.
(b) Except as otherwise provided in subsection (c), a secured party
of record may assign of record all or part of its power to authorize an
amendment to a financing statement by filing in the filing office an
amendment of the financing statement which:
(1) identifies, by its file number, the initial financing statement
to which it relates;
(2) provides the name of the assignor; and
(3) provides the name and mailing address of the assignee.
(c) An assignment of record of a security interest in a fixture
covered by a record of a mortgage which is effective as a financing
statement filed as a fixture filing under IC 26-1-9.1-502(c) may be
made only by an assignment of record of the mortgage in the manner
provided by law of this state other than IC 26-1.
IC 26-1-9.1-515 Version a
Duration and effectiveness of financing statement; effect of lapsed
financing statement
Note: This version of section effective until 7-1-2013. See also
following version of this section, effective 7-1-2013.
Sec. 515. (a) Except as otherwise provided in subsections (b), (e),
(f), and (g), a filed financing statement is effective for a period of
five (5) years after the date of filing.
(b) Except as otherwise provided in subsections (e), (f), and (g),
an initial financing statement filed in connection with a
public-finance transaction or manufactured-home transaction is
effective for a period of thirty (30) years after the date of filing if it
indicates that it is filed in connection with a public-finance
transaction or manufactured-home transaction.
(c) The effectiveness of a filed financing statement lapses on the
expiration of the period of its effectiveness unless, before the lapse,
a continuation statement is filed pursuant to subsection (d). Upon
lapse, a financing statement ceases to be effective and any security
interest or agricultural lien that was perfected by the financing
statement becomes unperfected, unless the security interest is
perfected otherwise. If the security interest or agricultural lien
becomes unperfected upon lapse, it is considered never to have been
perfected as against a purchaser of the collateral for value.
(d) A continuation statement may be filed only within six (6)
months before the expiration of the five (5) year period specified in
subsection (a) or the thirty (30) year period specified in subsection
(b), whichever is applicable.
(e) Except as otherwise provided in IC 26-1-9.1-510, upon timely
filing of a continuation statement, the effectiveness of the initial
financing statement continues for a period of five (5) years
commencing on the day on which the financing statement would
have become ineffective in the absence of the filing. Upon the
expiration of the five (5) year period, the financing statement lapses
in the same manner as provided in subsection (c), unless, before the
lapse, another continuation statement is filed pursuant to subsection
(d). Succeeding continuation statements may be filed in the same
manner to continue the effectiveness of the initial financing
statement.
(f) If a debtor is a transmitting utility and a filed financing
statement so indicates, the financing statement is effective until a
termination statement is filed.
(g) A record of a mortgage that is effective as a financing
statement filed as a fixture filing under IC 26-1-9.1-502(c) remains
effective as a financing statement filed as a fixture filing until the
mortgage is released or satisfied of record or its effectiveness
otherwise terminates as to the real property.
As added by P.L.57-2000, SEC.45.
statement under IC 26-1-9.1-514(a) or an amendment filed
under IC 26-1-9.1-514(b), the record does not provide a name
and mailing address for the assignee; or
(7) in the case of a continuation statement, the record is not
filed within the six (6) month period prescribed by
IC 26-1-9.1-515(d).
(c) For purposes of subsection (b):
(1) a record does not provide information if the filing office is
unable to read or decipher the information; and
(2) a record that does not indicate that it is an amendment or
identify an initial financing statement to which it relates, as
required by IC 26-1-9.1-512, IC 26-1-9.1-514, or
IC 26-1-9.1-518, is an initial financing statement.
(d) A record that is communicated to the filing office with tender
of the filing fee, but which the filing office refuses to accept for a
reason other than one (1) set forth in subsection (b), is effective as a
filed record except as against a purchaser of the collateral which
gives value in reasonable reliance upon the absence of the record
from the files.
As added by P.L.57-2000, SEC.45.
IC 26-1-9.1-516 Version b
What constitutes filing; effectiveness of filing
Note: This version of section effective 7-1-2013. See also
preceding version of this section, effective until 7-1-2013.
Sec. 516. (a) Except as otherwise provided in subsection (b),
communication of a record to a filing office and tender of the filing
fee or acceptance of the record by the filing office constitutes filing.
(b) Filing does not occur with respect to a record that a filing
office refuses to accept because:
(1) the record is not communicated by a method or medium of
communication authorized by the filing office;
(2) an amount equal to or greater than the applicable filing fee
is not tendered;
(3) the filing office is unable to index the record because:
(A) in the case of an initial financing statement, the record
does not provide a name for the debtor;
(B) in the case of an amendment or information statement,
the record:
(i) does not identify the initial financing statement as
required by IC 26-1-9.1-512 or IC 26-1-9.1-518, as
applicable; or
(ii) identifies an initial financing statement whose
effectiveness has lapsed under IC 26-1-9.1-515;
(C) in the case of an initial financing statement that provides
the name of a debtor identified as an individual or an
amendment that provides a name of a debtor identified as an
individual which was not previously provided in the
financing statement to which the record relates, the record
does not identify the debtor's surname; or
IC 26-1-9.1-517
Effect of indexing errors
Sec. 517. The failure of the filing office to index a record
correctly does not affect the effectiveness of the filed record.
As added by P.L.57-2000, SEC.45.
IC 26-1-9.1-518 Version a
Claim concerning inaccurate or wrongfully filed record
Note: This version of section effective until 7-1-2013. See also
following version of this section, effective 7-1-2013.
Sec. 518. (a) A person may file in the filing office a correction
statement with respect to a record indexed there under the person's
name if the person believes that the record is inaccurate or was
wrongfully filed.
(b) A correction statement must:
(1) identify the record to which it relates by the file number
assigned to the initial financing statement to which the record
relates;
(2) indicate that it is a correction statement; and
(3) provide the basis for the person's belief that the record is
inaccurate and indicate the manner in which the person believes
the record should be amended to cure any inaccuracy or provide
the basis for the person's belief that the record was wrongfully
filed.
(c) The filing of a correction statement does not affect the
effectiveness of an initial financing statement or other filed record.
As added by P.L.57-2000, SEC.45.
IC 26-1-9.1-518 Version b
Claim concerning inaccurate or wrongfully filed record
Note: This version of section effective 7-1-2013. See also
preceding version of this section, effective until 7-1-2013.
Sec. 518. (a) A person may file in the filing office an information
statement with respect to a record indexed there under the person's
name if the person believes that the record is inaccurate or was
wrongfully filed.
(b) An information statement under subsection (a) must:
(1) identify the record to which it relates by the file number
assigned to the initial financing statement to which the record
relates;
(2) indicate that it is an information statement; and
(3) provide the basis for the person's belief that the record is
inaccurate and indicate the manner in which the person believes
the record should be amended to cure any inaccuracy or provide
the basis for the person's belief that the record was wrongfully
filed.
(c) A person may file in the filing office an information statement
with respect to a record filed there if the person is a secured party of
record with respect to the financing statement to which the record
relates and believes that the person that filed the record was not
entitled to do so under IC 26-1-9.1-509(d).
(d) An information statement under subsection (c) must:
(1) identify the record to which it relates by the file number
assigned to the initial financing statement to which the record
relates;
(2) indicate that it is an information statement; and
(3) provide the basis for the person's belief that the person that
filed the record was not entitled to do so under
IC 26-1-9.1-509(d).
(e) The filing of an information statement does not affect the
effectiveness of an initial financing statement or other filed record.
As added by P.L.57-2000, SEC.45. Amended by P.L.54-2011,
SEC.17.
IC 26-1-9.1-519
Numbering, maintaining, and indexing records; communicating
information provided in records
Sec. 519. (a) For each record filed in a filing office, the filing
office shall:
(1) assign a unique number to the filed record;
(2) create a record that bears the number assigned to the filed
record and the date and time of filing;
(3) maintain the filed record for public inspection; and
(4) index the filed record in accordance with subsections (c),
(d), and (e).
(b) A file number must include a digit that:
(1) is mathematically derived from or related to the other digits
of the file number; and
(2) aids the filing office in determining whether a number
communicated as the file number includes a single-digit or
transpositional error.
(c) Except as otherwise provided in subsections (d) and (e), the
filing office shall:
(1) index an initial financing statement according to the name
of the debtor and index all filed records relating to the initial
financing statement in a manner that associates with one
another an initial financing statement and all filed records
relating to the initial financing statement; and
(2) index a record that provides a name of a debtor that was not
previously provided in the financing statement to which the
record relates also according to the name that was not
previously provided.
(d) If a financing statement is filed as a fixture filing or covers
as-extracted collateral or timber to be cut, the filing office shall index
it:
(1) under the names of the debtor and of each owner of record
shown on the financing statement as if they were the
mortgagors under a mortgage of the real property described; and
(2) to the extent that the law of this state provides for indexing
of records of mortgages under the name of the mortgagee, under
the name of the secured party as if the secured party were the
mortgagee thereunder, or, if indexing is by description, as if the
financing statement were a record of a mortgage of the real
property described.
(e) If a financing statement is filed as a fixture filing or covers
as-extracted collateral or timber to be cut, the filing office shall index
an assignment filed under IC 26-1-9.1-514(a) or an amendment filed
under IC 26-1-9.1-514(b):
(1) under the name of the assignor as grantor; and
(2) to the extent that the law of this state provides for indexing
a record of the assignment of a mortgage under the name of the
assignee, under the name of the assignee.
IC 26-1-9.1-520
Acceptance and refusal to accept record
Sec. 520. (a) A filing office shall refuse to accept a record for
filing for a reason set forth in IC 26-1-9.1-516(b) and may refuse to
accept a record for filing only for a reason set forth in
IC 26-1-9.1-516(b).
(b) If a filing office refuses to accept a record for filing, it shall
communicate to the person that presented the record the fact of and
reason for the refusal and the date and time the record would have
been filed had the filing office accepted it. The communication must
be made at the time and in the manner prescribed by filing-office
rule, but in the case of a filing office described in
IC 26-1-9.1-501(a)(2), in no event more than two (2) business days
after the filing office receives the record.
(c) A filed financing statement satisfying IC 26-1-9.1-502(a) and
IC 26-1-9.1-502(b) is effective, even if the filing office is required to
refuse to accept it for filing under subsection (a). However,
IC 26-1-9.1-338 applies to a filed financing statement providing
information described in IC 26-1-9.1-516(b)(5) that is incorrect at the
time the financing statement is filed.
(d) If a record communicated to a filing office provides
information that relates to more than one (1) debtor, IC 26-1-9.1-501
through IC 26-1-9.1-527 apply as to each debtor separately.
As added by P.L.57-2000, SEC.45.
IC 26-1-9.1-521 Version a
Uniform form of written financing statement and amendment
Note: This version of section effective until 7-1-2013. See also
following version of this section, effective 7-1-2013.
Sec. 521. (a) A filing office that accepts written records may not
refuse to accept a written initial financing statement in the form
specified in IC 26-1-1.5 and format except for a reason set forth in
IC 26-1-9.1-516(b).
(b) A filing office that accepts written records may not refuse to
accept a written record in the form specified in IC 26-1-1.5 and
format except for a reason described in IC 26-1-9.1-516(b).
As added by P.L.57-2000, SEC.45. Amended by P.L.1-2007,
SEC.182.
IC 26-1-9.1-521 Version b
Uniform form of written financing statement and amendment
Note: This version of section effective 7-1-2013. See also
preceding version of this section, effective until 7-1-2013.
Sec. 521. (a) A filing office that accepts written records may not
refuse to accept a written initial financing statement in the following
form and format except for a reason set forth in IC 26-1-9.1-516(b):
UCC FINANCING STATEMENT
FOLLOW INSTRUCTIONS
A. NAME & PHONE OF CONTACT AT FILER (optional)
_____________________________________________
B. E-MAIL CONTACT AT FILER (optional)
____________________________________________
C. SEND ACKNOWLEDGMENT TO: (Name and Address)
______________________________________________
IC 26-1-9.1-523
Information from filing office; sale or license of records
Sec. 523. (a) If a person that files a written record requests an
acknowledgment of the filing, the filing office shall send to the
person an image of the record showing the number assigned to the
record pursuant to IC 26-1-9.1-519(a)(1) and the date and time of the
filing of the record. However, if the person furnishes a copy of the
record to the filing office, the filing office may instead:
(1) note upon the copy the number assigned to the record
pursuant to IC 26-1-9.1-519(a)(1) and the date and time of the
filing of the record; and
(2) send the copy to the person.
(b) If a person files a record other than a written record, the filing
office shall communicate to the person an acknowledgment that
provides:
(1) the information in the record;
(2) the number assigned to the record pursuant to
IC 26-1-9.1-519(a)(1); and
(3) the date and time of the filing of the record.
(c) The filing office shall communicate or otherwise make
available in a record the following information to any person that
requests it:
(1) whether there is on file on a date and time specified by the
filing office, but not a date earlier than three (3) business days
before the filing office receives the request, any financing
statement that:
(A) designates a particular debtor or, if the request so states,
designates a particular debtor at the address specified in the
request;
(B) has not lapsed under IC 26-1-9.1-515 with respect to all
secured parties of record; and
(C) if the request so states, has lapsed under IC 26-1-9.1-515
and a record of which is maintained by the filing office
under IC 26-1-9.1-522(a);
(2) the date and time of filing of each financing statement; and
(3) the information provided in each financing statement.
(d) In complying with its duty under subsection (c), the filing
office may communicate information in any medium. However, if
requested, the filing office shall communicate information by issuing
its written certificate.
(e) The filing office shall perform the acts required by subsections
(a) through (d) at the time and in the manner prescribed by
filing-office rule, but not later than two (2) business days after the
filing office receives the request.
(f) At least weekly, the secretary of state shall offer to sell or
license to the public on a nonexclusive basis, in bulk, copies of all
records filed in it under IC 26-1-9.1-501 through IC 26-1-9.1-527, in
every medium from time to time available to the filing office.
As added by P.L.57-2000, SEC.45. Amended by P.L.165-2001,
SEC.15.
IC 26-1-9.1-524
Delay by filing office
Sec. 524. Delay by the filing office beyond a time limit prescribed
in IC 26-1-9.1-501 through IC 26-1-9.1-527 is excused if:
(1) the delay is caused by interruption of communication or
computer facilities, war, emergency conditions, failure of
equipment, or other circumstances beyond control of the filing
office; and
(2) the filing office exercises reasonable diligence under the
circumstances.
As added by P.L.57-2000, SEC.45.
IC 26-1-9.1-525
Fees
Sec. 525. (a) Except as otherwise provided in subsection (e), the
fee for filing and indexing a record under IC 26-1-9.1-501 through
IC 26-1-9.1-527, other than an initial financing statement of the kind
described in IC 26-1-9.1-502(c), is:
(1) four dollars ($4) if the record is communicated in writing,
including by facsimile, and consists of one (1) or two (2) pages;
(2) eight dollars ($8) if the record is communicated in writing,
including by facsimile, and consists of more than two (2) pages;
and
(3) no fee if the record is communicated by electronic filing.
(b) Except as otherwise provided in subsection (e), the fee for
filing and indexing an initial financing statement of the kind
described in IC 26-1-9.1-502(c) is:
(1) eight dollars ($8) if the financing statement indicates that it
is filed in connection with a public-finance transaction; and
(2) eight dollars ($8) if the financing statement indicates that it
is filed in connection with a manufactured-home transaction.
(c) The fee for responding to a request for information from the
filing office, including for issuing a certificate showing whether there
is on file any financing statement naming a particular debtor, is:
(1) five dollars ($5) if the request is communicated in writing,
including by facsimile; and
(2) no fee if the request is communicated electronically.
(d) This section does not require a fee with respect to a record of
a mortgage which is effective as a financing statement filed as a
fixture filing or as a financing statement covering as-extracted
collateral or timber to be cut under IC 26-1-9.1-502(c). However, the
recording and satisfaction fees that otherwise would be applicable to
the record of the mortgage apply.
As added by P.L.57-2000, SEC.45. Amended by P.L.165-2001,
SEC.16; P.L.277-2001, SEC.26.
IC 26-1-9.1-526
Filing_office rules
Sec. 526. (a) The secretary of state shall adopt and publish rules
to implement IC 26-1-9.1. The filing-office rules must be consistent
with IC 26-1-9.1.
(b) To keep the filing-office rules and practices of the filing office
in harmony with the rules and practices of filing offices in other
jurisdictions that enact substantially IC 26-1-9.1-501 through
IC 26-1-9.1-527, and to keep the technology used by the filing office
compatible with the technology used by filing offices in other
jurisdictions that enact substantially IC 26-1-9.1-501 through
IC 26-1-9.1-527, the secretary of state, so far as is consistent with the
purposes, policies, and provisions of IC 26-1-9.1, in adopting,
amending, and repealing filing-office rules, shall:
(1) consult with filing offices in other jurisdictions that enact
substantially IC 26-1-9.1-501 through IC 26-1-9.1-527;
(2) consult the most recent version of the Model Rules
promulgated by the International Association of Corporate
Administrators or any successor organization; and
(3) take into consideration the rules and practices of, and the
technology used by, filing offices in other jurisdictions that
enact substantially IC 26-1-9.1-501 through IC 26-1-9.1-527.
As added by P.L.57-2000, SEC.45. Amended by P.L.165-2001,
SEC.17.
IC 26-1-9.1-527
Duty to report
Sec. 527. The secretary of state shall report annually to the
general assembly on the operation of the filing office. The report
must be in an electronic format under IC 5-14-6 and must contain a
statement of the extent to which:
(1) the filing office rules are not in harmony with the rules of
filing offices in other jurisdictions that enact substantially
IC 26-1-9.1-501 through IC 26-1-9.1-527 and the reasons for
these variations; and
(2) the filing office rules are not in harmony with the most
recent version of the Model Rules promulgated by the
International Association of Corporate Administrators, or any
successor organization, and the reasons for these variations.
As added by P.L.57-2000, SEC.45. Amended by P.L.28-2004,
SEC.164.
IC 26-1-9.1-601
Rights after default; judicial enforcement; consignor or buyer of
accounts, chattel paper, payment intangibles, or promissory notes
Sec. 601. (a) After default, a secured party has the rights provided
in this section through IC 26-1-9.1-628 and, except as otherwise
provided in IC 26-1-9.1-602, those provided by agreement of the
parties. A secured party:
(1) may reduce a claim to judgment, foreclose, or otherwise
enforce the claim, security interest, or agricultural lien by any
available judicial procedure; and
(2) if the collateral is documents, may proceed either as to the
documents or as to the goods they cover.
(b) A secured party in possession of collateral or control of
collateral under IC 26-1-7-106, IC 26-1-9.1-104, IC 26-1-9.1-105,
IC 26-1-9.1-106, or IC 26-1-9.1-107 has the rights and duties
provided in IC 26-1-9.1-207.
(c) The rights under subsections (a) and (b) are cumulative and
may be exercised simultaneously.
(d) Except as otherwise provided in subsection (g) and
IC 26-1-9.1-605, after default, a debtor and an obligor have the rights
provided in IC 26-1-9.1-601 through IC 26-1-9.1-628 and by
agreement of the parties.
(e) If a secured party has reduced its claim to judgment, the lien
of any levy that may be made upon the collateral by virtue of an
execution based upon the judgment relates back to the earliest of:
(1) the date of perfection of the security interest or agricultural
lien in the collateral;
(2) the date of filing a financing statement covering the
collateral; or
(3) any date specified in a statute under which the agricultural
lien was created.
(f) A sale pursuant to an execution is a foreclosure of the security
interest or agricultural lien by judicial procedure within the meaning
of this section. A secured party may purchase at the sale and
thereafter hold the collateral free of any other requirements of
IC 26-1-9.1.
(g) Except as otherwise provided in IC 26-1-9.1-607(c),
IC 26-1-9.1-601 through IC 26-1-9.1-628 impose no duties upon a
secured party that is a consignor or is a buyer of accounts, chattel
paper, payment intangibles, or promissory notes.
As added by P.L.57-2000, SEC.45. Amended by P.L.143-2007,
SEC.76.
IC 26-1-9.1-603
Agreement on standards concerning rights and duties
Sec. 603. (a) The parties may determine by agreement the
standards measuring the fulfillment of the rights of a debtor or
obligor and the duties of a secured party under a rule stated in
IC 26-1-9.1-602 if the standards are not manifestly unreasonable.
(b) Subsection (a) does not apply to the duty under
IC 26-1-9.1-609 to refrain from breaching the peace.
As added by P.L.57-2000, SEC.45.
IC 26-1-9.1-604
Procedure if security agreement covers real property or fixtures
Sec. 604. (a) If a security agreement covers both personal and real
property, a secured party may proceed:
(1) under IC 26-1-9.1-601 through IC 26-1-9.1-628 as to the
personal property without prejudicing any rights with respect to
the real property; or
(2) as to both the personal property and the real property in
accordance with the rights with respect to the real property, in
which case the other provisions of IC 26-1-9.1-601 through
IC 26-1-9.1-628 do not apply.
(b) Subject to subsection (c), if a security agreement covers goods
that are or become fixtures, a secured party may proceed:
(1) under IC 26-1-9.1-601 through IC 26-1-9.1-628; or
(2) in accordance with the rights with respect to real property,
in which case the other provisions of IC 26-1-9.1-601 through
IC 26-1-9.1-628 do not apply.
(c) Subject to the other provisions of IC 26-1-9.1-601 through
IC 26-1-9.1-628, if a secured party holding a security interest in
fixtures has priority over all owners and encumbrancers of the real
property, the secured party, after default, may remove the collateral
from the real property.
(d) A secured party that removes collateral shall promptly
reimburse any encumbrancer or owner of the real property, other
than the debtor, for the cost of repair of any physical injury caused
by the removal. The secured party need not reimburse the
encumbrancer or owner for any diminution in value of the real
property caused by the absence of the goods removed or by any
necessity of replacing them. A person entitled to reimbursement may
refuse permission to remove until the secured party gives adequate
assurance for the performance of the obligation to reimburse.
As added by P.L.57-2000, SEC.45.
IC 26-1-9.1-605
Unknown debtor or secondary obligor
Sec. 605. A secured party does not owe a duty based on its status
as secured party:
(1) to a person that is a debtor or obligor, unless the secured
party knows:
(A) that the person is a debtor or obligor;
(B) the identity of the person; and
(C) how to communicate with the person; or
(2) to a secured party or lienholder that has filed a financing
statement against a person, unless the secured party knows:
(A) that the person is a debtor; and
(B) the identity of the person.
As added by P.L.57-2000, SEC.45.
IC 26-1-9.1-606
Time of default for agricultural lien
Sec. 606. For purposes of IC 26-1-9.1-601 through
IC 26-1-9.1-628, a default occurs in connection with an agricultural
lien at the time the secured party becomes entitled to enforce the lien
in accordance with the statute under which it was created.
As added by P.L.57-2000, SEC.45.
IC 26-1-9.1-607 Version a
Collection and enforcement by secured party
Note: This version of section effective until 7-1-2013. See also
following version of this section, effective 7-1-2013.
Sec. 607. (a) If so agreed, and in any event after default, a secured
party:
(1) may notify an account debtor or other person obligated on
collateral to make payment or otherwise render performance to
or for the benefit of the secured party;
(2) may take any proceeds to which the secured party is entitled
under IC 26-1-9.1-315;
(3) may enforce the obligations of an account debtor or other
person obligated on collateral and exercise the rights of the
debtor with respect to the obligation of the account debtor or
other person obligated on collateral to make payment or
otherwise render performance to the debtor, and with respect to
any property that secures the obligations of the account debtor
or other person obligated on the collateral;
(4) if it holds a security interest in a deposit account perfected
by control under IC 26-1-9.1-104(a)(1), may apply the balance
of the deposit account to the obligation secured by the deposit
account; and
(5) if it holds a security interest in a deposit account perfected
by control under IC 26-1-9.1-104(a)(2) or
IC 26-1-9.1-104-(a)(3), may instruct the bank to pay the balance
of the deposit account to or for the benefit of the secured party.
(b) If necessary to enable a secured party to exercise under
subsection (a)(3) the right of a debtor to enforce a mortgage
nonjudicially, the secured party may record in the office in which a
record of the mortgage is recorded:
(1) a copy of the security agreement that creates or provides for
a security interest in the obligation secured by the mortgage;
and
(2) the secured party's sworn affidavit in recordable form stating
that:
(A) a default has occurred; and
(B) the secured party is entitled to enforce the mortgage
nonjudicially.
(c) A secured party shall proceed in a commercially reasonable
manner if the secured party:
(1) undertakes to collect from or enforce an obligation of an
account debtor or other person obligated on collateral; and
(2) is entitled to charge back uncollected collateral or otherwise
to full or limited recourse against the debtor or a secondary
obligor.
(d) A secured party may deduct from the collections made
pursuant to subsection (c) reasonable expenses of collection and
enforcement, including reasonable attorney's fees and legal expenses
incurred by the secured party.
(e) This section does not determine whether an account debtor,
bank, or other person obligated on collateral owes a duty to a secured
party.
As added by P.L.57-2000, SEC.45.
IC 26-1-9.1-607 Version b
Collection and enforcement by secured party
Note: This version of section effective 7-1-2013. See also
preceding version of this section, effective until 7-1-2013.
Sec. 607. (a) If so agreed, and in any event after default, a secured
party:
(1) may notify an account debtor or other person obligated on
collateral to make payment or otherwise render performance to
or for the benefit of the secured party;
(2) may take any proceeds to which the secured party is entitled
under IC 26-1-9.1-315;
(3) may enforce the obligations of an account debtor or other
person obligated on collateral and exercise the rights of the
debtor with respect to the obligation of the account debtor or
other person obligated on collateral to make payment or
otherwise render performance to the debtor, and with respect to
any property that secures the obligations of the account debtor
or other person obligated on the collateral;
(4) if it holds a security interest in a deposit account perfected
by control under IC 26-1-9.1-104(a)(1), may apply the balance
of the deposit account to the obligation secured by the deposit
account; and
(5) if it holds a security interest in a deposit account perfected
by control under IC 26-1-9.1-104(a)(2) or
IC 26-1-9.1-104(a)(3), may instruct the bank to pay the balance
of the deposit account to or for the benefit of the secured party.
(b) If necessary to enable a secured party to exercise under
subsection (a)(3) the right of a debtor to enforce a mortgage
nonjudicially, the secured party may record in the office in which a
record of the mortgage is recorded:
(1) a copy of the security agreement that creates or provides for
a security interest in the obligation secured by the mortgage;
and
(2) the secured party's sworn affidavit in recordable form stating
that:
(A) a default has occurred with respect to the obligation
secured by the mortgage; and
(B) the secured party is entitled to enforce the mortgage
nonjudicially.
(c) A secured party shall proceed in a commercially reasonable
manner if the secured party:
(1) undertakes to collect from or enforce an obligation of an
account debtor or other person obligated on collateral; and
(2) is entitled to charge back uncollected collateral or otherwise
to full or limited recourse against the debtor or a secondary
obligor.
(d) A secured party may deduct from the collections made
pursuant to subsection (c) reasonable expenses of collection and
enforcement, including reasonable attorney's fees and legal expenses
incurred by the secured party.
(e) This section does not determine whether an account debtor,
bank, or other person obligated on collateral owes a duty to a secured
party.
As added by P.L.57-2000, SEC.45. Amended by P.L.54-2011,
SEC.19.
IC 26-1-9.1-608
Application of proceeds of collection or enforcement; liability for
deficiency and right to surplus
Sec. 608. (a) If a security interest or agricultural lien secures
payment or performance of an obligation, the following rules apply:
(1) A secured party shall apply or pay over for application the
cash proceeds of collection or enforcement under
IC 26-1-9.1-607 in the following order to:
(A) the reasonable expenses of collection and enforcement
and, to the extent provided for by agreement and not
prohibited by law, reasonable attorney's fees and legal
expenses incurred by the secured party;
(B) the satisfaction of obligations secured by the security
interest or agricultural lien under which the collection or
enforcement is made; and
(C) the satisfaction of obligations secured by any
subordinate security interest in or other lien on the collateral
subject to the security interest or agricultural lien under
which the collection or enforcement is made if the secured
party receives an authenticated demand for proceeds before
distribution of the proceeds is completed.
(2) If requested by a secured party, a holder of a subordinate
security interest or other lien shall furnish reasonable proof of
the interest or lien within a reasonable time. Unless the holder
complies, the secured party need not comply with the holder's
demand under subdivision (1)(C).
(3) A secured party need not apply or pay over for application
noncash proceeds of collection and enforcement under
IC 26-1-9.1-607 unless the failure to do so would be
commercially unreasonable. A secured party that applies or
pays over for application noncash proceeds shall do so in a
commercially reasonable manner.
(4) A secured party shall account to and pay a debtor for any
surplus, and the obligor is liable for any deficiency.
(b) If the underlying transaction is a sale of accounts, chattel
paper, payment intangibles, or promissory notes, the debtor is not
entitled to any surplus, and the obligor is not liable for any
deficiency.
As added by P.L.57-2000, SEC.45.
IC 26-1-9.1-609
Secured party's right to take possession after default
Sec. 609. (a) After default, a secured party:
(1) may take possession of the collateral; and
(2) without removal, may render equipment unusable and
dispose of collateral on a debtor's premises under
IC 26-1-9.1-610.
(b) A secured party may proceed under subsection (a):
(1) pursuant to judicial process; or
(2) without judicial process, if it proceeds without breach of the
peace.
(c) If so agreed, and in any event after default, a secured party
may require the debtor to assemble the collateral and make it
available to the secured party at a place to be designated by the
secured party which is reasonably convenient to both parties.
As added by P.L.57-2000, SEC.45.
IC 26-1-9.1-610
Disposition of collateral after default
Sec. 610. (a) After default, a secured party may sell, lease, license,
or otherwise dispose of any or all of the collateral in its present
condition or following any commercially reasonable preparation or
processing.
(b) Every aspect of a disposition of collateral, including the
method, manner, time, place, and other terms, must be commercially
reasonable. If commercially reasonable, a secured party may dispose
of collateral by public or private proceedings, by one or more
contracts, as a unit or in parcels, and at any time and place and on
any terms.
(c) A secured party may purchase collateral:
(1) at a public disposition; or
(2) at a private disposition only if the collateral is of a kind that
is customarily sold on a recognized market or the subject of
widely distributed standard price quotations.
(d) A contract for sale, lease, license, or other disposition includes
the warranties relating to title, possession, quiet enjoyment, and the
like, which by operation of law accompany a voluntary disposition
of property of the kind subject to the contract.
(e) A secured party may disclaim or modify warranties under
subsection (d):
(1) in a manner that would be effective to disclaim or modify
the warranties in a voluntary disposition of property of the kind
subject to the contract of disposition; or
(2) by communicating to the purchaser a record evidencing the
contract for disposition and including an express disclaimer or
modification of the warranties.
IC 26-1-9.1-611
Notification before disposition of collateral
Sec. 611. (a) As used in this section, "notification date" means the
earlier of the date on which:
(1) a secured party sends to the debtor and any secondary
obligor an authenticated notification of disposition; or
(2) the debtor and any secondary obligor waive the right to
notification.
(b) Except as otherwise provided in subsection (d), a secured
party that disposes of collateral under IC 26-1-9.1-610 shall send to
the persons specified in subsection (c) a reasonable authenticated
notification of disposition.
(c) To comply with subsection (b), the secured party shall send an
authenticated notification of disposition to:
(1) the debtor;
(2) any secondary obligor; and
(3) if the collateral is other than consumer goods:
(A) any other person from which the secured party has
received, before the notification date, an authenticated
notification of a claim of an interest in the collateral;
(B) any other secured party or lienholder that, ten (10) days
before the notification date, held a security interest in or
other lien on the collateral perfected by the filing of a
financing statement that:
(i) identified the collateral;
(ii) was indexed under the debtor's name as of that date;
and
(iii) was filed in the office in which to file a financing
statement against the debtor covering the collateral as of
that date; and
(C) any other secured party that, ten (10) days before the
notification date, held a security interest in the collateral
perfected by compliance with a statute, regulation, or treaty
described in IC 26-1-9.1-311(a).
(d) Subsection (b) does not apply if the collateral is perishable or
threatens to decline speedily in value or is of a type customarily sold
on a recognized market.
(e) A secured party complies with the requirement for notification
prescribed in subsection (c)(3)(B) if:
(1) not later than twenty (20) days or earlier than thirty (30)
days before the notification date, the secured party requests, in
a commercially reasonable manner, information concerning
financing statements indexed under the debtor's name in the
office indicated in subsection (c)(3)(B); and
IC 26-1-9.1-612
Timeliness of notification before disposition of collateral
Sec. 612. (a) Except as otherwise provided in subsection (b),
whether a notification is sent within a reasonable time is a question
of fact.
(b) In a transaction other than a consumer transaction, a
notification of disposition sent after default and ten (10) days or
more before the earliest time of disposition set forth in the
notification is sent within a reasonable time before the disposition.
As added by P.L.57-2000, SEC.45.
IC 26-1-9.1-613
Contents and form of notification before disposition of collateral;
general
Sec. 613. Except in a consumer-goods transaction, the following
rules apply:
(1) The contents of a notification of disposition are sufficient if
the notification:
(A) describes the debtor and the secured party;
(B) describes the collateral that is the subject of the intended
disposition;
(C) states the method of intended disposition;
(D) states that the debtor is entitled to an accounting of the
unpaid indebtedness and states the charge, if any, for an
accounting; and
(E) states the time and place of a public disposition or the
time after which any other disposition is to be made.
(2) Whether the contents of a notification that lacks any of the
information specified in subdivision (1) are nevertheless
sufficient is a question of fact.
(3) The contents of a notification providing substantially the
information specified in subdivision (1) are sufficient, even if
the notification includes:
(A) information not specified by that subdivision; or
(B) minor errors that are not seriously misleading.
(4) A particular phrasing of the notification is not required.
(5) The following form of notification and the form appearing
in IC 26-1-9.1-614(3), when completed, each provides sufficient
information:
notification is sent
From: Name, address, and telephone number of secured party
Name of Debtor(s): Include only if debtor(s) are not an
addressee
(For a public disposition:)
We will sell (or lease or license, as applicable) the describe
collateral to the highest qualified bidder in public as follows:
Day and Date: _____________________
Time: _________
Place: ____________________________
(For a private disposition:)
We will sell (or lease or license, as applicable) the describe
collateral privately sometime after day and date.
You are entitled to an accounting of the unpaid indebtedness
secured by the property that we intend to sell (or lease or license, as
applicable) (for a charge of $____). You may request an accounting
by calling us at telephone number.
IC 26-1-9.1-614
Contents and form of notification before disposition of collateral;
consumer goods transaction
Sec. 614. In a consumer-goods transaction, the following rules
apply:
(1) A notification of disposition must provide the following
information:
(A) The information specified in IC 26-1-9.1-613(1).
(B) A description of any liability for a deficiency of the
person to which the notification is sent.
(C) A telephone number from which the amount that must be
paid to the secured party to redeem the collateral under
IC 26-1-9.1-623 is available.
(D) A telephone number or mailing address from which
additional information concerning the disposition and the
obligation secured is available.
(2) A particular phrasing of the notification is not required.
(3) The following form of notification, when completed,
provides sufficient information:
Name and address of secured party
Date
IC 26-1-9.1-615
Application of proceeds of disposition; liability for deficiency and
right to surplus
Sec. 615. (a) A secured party shall apply or pay over for
application the cash proceeds of disposition under IC 26-1-9.1-610
in the following order to:
(1) the reasonable expenses of retaking, holding, preparing for
disposition, processing, and disposing, and, to the extent
provided for by agreement and not prohibited by law,
reasonable attorney's fees and legal expenses incurred by the
secured party;
of the holder of a security interest or other lien that is not subordinate
to the security interest or agricultural lien under which the
disposition is made:
(1) takes the cash proceeds free of the security interest or other
lien;
(2) is not obligated to apply the proceeds of the disposition to
the satisfaction of obligations secured by the security interest or
other lien; and
(3) is not obligated to account to or pay the holder of the
security interest or other lien for any surplus.
As added by P.L.57-2000, SEC.45.
IC 26-1-9.1-616
Explanation of calculation of surplus or deficiency
Sec. 616. (a) As used in this section:
(1) "Explanation" means a writing that:
(A) states the amount of the surplus or deficiency;
(B) provides an explanation in accordance with subsection
(c) of how the secured party calculated the surplus or
deficiency;
(C) states, if applicable, that future debits, credits, charges,
including additional credit service charges or interest,
rebates, and expenses may affect the amount of the surplus
or deficiency; and
(D) provides a telephone number or mailing address from
which additional information concerning the transaction is
available.
(2) "Request" means a record:
(A) authenticated by a debtor or consumer obligor;
(B) requesting that the recipient provide an explanation; and
(C) sent after disposition of the collateral under
IC 26-1-9.1-610.
(b) In a consumer-goods transaction in which the debtor is entitled
to a surplus or a consumer obligor is liable for a deficiency under
IC 26-1-9.1-615, the secured party shall:
(1) send an explanation to the debtor or consumer obligor, as
applicable, after the disposition and:
(A) before or when the secured party accounts to the debtor
and pays any surplus or first makes written demand on the
consumer obligor after the disposition for payment of the
deficiency; and
(B) within fourteen (14) days after receipt of a request; or
(2) in the case of a consumer obligor who is liable for a
deficiency, within fourteen (14) days after receipt of a request,
send to the consumer obligor a record waiving the secured
party's right to a deficiency.
(c) To comply with subsection (a)(1)(B), a writing must provide
the following information in the following order:
(1) the aggregate amount of obligations secured by the security
interest under which the disposition was made, and, if the
amount reflects a rebate of unearned interest or credit service
charge, an indication of that fact, calculated as of a specified
date:
(A) if the secured party takes or receives possession of the
collateral after default, not more than thirty-five (35) days
before the secured party takes or receives possession; or
(B) if the secured party takes or receives possession of the
collateral before default or does not take possession of the
collateral, not more than thirty-five (35) days before the
disposition;
(2) the amount of proceeds of the disposition;
(3) the aggregate amount of the obligations after deducting the
amount of proceeds;
(4) the amount, in the aggregate or by type, and types of
expenses, including expenses of retaking, holding, preparing for
disposition, processing, and disposing of the collateral, and
attorney's fees secured by the collateral that are known to the
secured party and relate to the current disposition;
(5) the amount, in the aggregate or by type, and types of credits,
including rebates of interest or credit service charges, to which
the obligor is known to be entitled and that are not reflected in
the amount in paragraph (1); and
(6) the amount of the surplus or deficiency.
(d) A particular phrasing of the explanation is not required. An
explanation complying substantially with the requirements of
subsection (a) is sufficient, even if it includes minor errors that are
not seriously misleading.
(e) A debtor or consumer obligor is entitled without charge to one
(1) response to a request under this section during any six (6) month
period in which the secured party did not send to the debtor or
consumer obligor an explanation pursuant to subsection (b)(1). The
secured party may require payment of a charge not exceeding
twenty-five dollars ($25) for each additional response.
As added by P.L.57-2000, SEC.45.
IC 26-1-9.1-617
Rights of transferee of collateral
Sec. 617. (a) A secured party's disposition of collateral after
default:
(1) transfers to a transferee for value all of the debtor's rights in
the collateral;
(2) discharges the security interest under which the disposition
is made; and
(3) discharges any subordinate security interest or other
subordinate lien.
(b) A transferee that acts in good faith takes free of the rights and
interests described in subsection (a), even if the secured party fails
to comply with IC 26-1-9.1 or the requirements of any judicial
proceeding.
(c) If a transferee does not take free of the rights and interests
described in subsection (a), the transferee takes the collateral subject
to:
(1) the debtor's rights in the collateral;
(2) the security interest or agricultural lien under which the
disposition is made; and
(3) any security interest or other lien.
As added by P.L.57-2000, SEC.45.
IC 26-1-9.1-618
Rights and duties of certain secondary obligors
Sec. 618. (a) A secondary obligor acquires the rights and becomes
obligated to perform the duties of the secured party after the
secondary obligor:
(1) receives an assignment of a secured obligation from the
secured party;
(2) receives a transfer of collateral from the secured party and
agrees to accept the rights and assume the duties of the secured
party; or
(3) is subrogated to the rights of a secured party with respect to
collateral.
(b) An assignment, transfer, or subrogation described in
subsection (a):
(1) is not a disposition of collateral under IC 26-1-9.1-610; and
(2) relieves the secured party of further duties under
IC 26-1-9.1.
As added by P.L.57-2000, SEC.45.
IC 26-1-9.1-619
Transfer of record or legal title
Sec. 619. (a) In this section, "transfer statement" means a record
authenticated by a secured party stating:
(1) that the debtor has defaulted in connection with an
obligation secured by specified collateral;
(2) that the secured party has exercised its post-default remedies
with respect to the collateral;
(3) that, by reason of the exercise, a transferee has acquired the
rights of the debtor in the collateral; and
(4) the name and mailing address of the secured party, debtor,
and transferee.
(b) A transfer statement entitles the transferee to the transfer of
record of all rights of the debtor in the collateral specified in the
statement in any official filing, recording, registration, or
certificate-of-title system covering the collateral. If a transfer
statement is presented with the applicable fee and request form to the
official or office responsible for maintaining the system, the official
or office shall:
(1) accept the transfer statement;
(2) promptly amend its records to reflect the transfer; and
(3) if applicable, issue a new appropriate certificate of title in
the name of transferee.
IC 26-1-9.1-620
Acceptance of collateral in full or partial satisfaction of obligation;
compulsory disposition of collateral
Sec. 620. (a) Except as otherwise provided in subsection (g), a
secured party may accept collateral in full or partial satisfaction of
the obligation it secures only if:
(1) the debtor consents to the acceptance under subsection (c);
(2) the secured party does not receive, within the time set forth
in subsection (d), a notification of objection to the proposal
authenticated by:
(A) a person to which the secured party was required to send
a proposal under IC 26-1-9.1-621; or
(B) any other person, other than the debtor, holding an
interest in the collateral subordinate to the security interest
that is the subject of the proposal;
(3) if the collateral is consumer goods, the collateral is not in
the possession of the debtor when the debtor consents to the
acceptance; and
(4) subsection (e) does not require the secured party to dispose
of the collateral or the debtor waives the requirement pursuant
to IC 26-1-9.1-624.
(b) A purported or apparent acceptance of collateral under this
section is ineffective unless:
(1) the secured party consents to the acceptance in an
authenticated record or sends a proposal to the debtor; and
(2) the conditions of subsection (a) are met.
(c) For purposes of this section:
(1) a debtor consents to an acceptance of collateral in partial
satisfaction of the obligation it secures only if the debtor agrees
to the terms of the acceptance in a record authenticated after
default; and
(2) a debtor consents to an acceptance of collateral in full
satisfaction of the obligation it secures only if the debtor agrees
to the terms of the acceptance in a record authenticated after
default or the secured party:
(A) sends to the debtor after default a proposal that is
unconditional or subject only to a condition that collateral
not in the possession of the secured party be preserved or
maintained;
(B) in the proposal, proposes to accept collateral in full
satisfaction of the obligation it secures; and
(C) does not receive a notification of objection authenticated
by the debtor within twenty (20) days after the proposal is
sent.
IC 26-1-9.1-621
Notification of proposal to accept collateral
Sec. 621. (a) A secured party that desires to accept collateral in
full or partial satisfaction of the obligation it secures shall send its
proposal to:
(1) any person from which the secured party has received,
before the debtor consented to the acceptance, an authenticated
notification of a claim of an interest in the collateral;
(2) any other secured party or lienholder that, ten (10) days
before the debtor consented to the acceptance, held a security
interest in or other lien on the collateral perfected by the filing
of a financing statement that:
(A) identified the collateral;
(B) was indexed under the debtor's name as of that date; and
(C) was filed in the office or offices in which to file a
financing statement against the debtor covering the collateral
as of that date; and
(3) any other secured party that, ten (10) days before the debtor
consented to the acceptance, held a security interest in the
collateral perfected by compliance with a statute, regulation, or
treaty described in IC 26-1-9.1-311(a).
IC 26-1-9.1-622
Effect of acceptance of collateral
Sec. 622. (a) A secured party's acceptance of collateral in full or
partial satisfaction of the obligation it secures:
(1) discharges the obligation to the extent consented to by the
debtor;
(2) transfers to the secured party all of a debtor's rights in the
collateral;
(3) discharges the security interest or agricultural lien that is the
subject of the debtor's consent and any subordinate security
interest or other subordinate lien; and
(4) terminates any other subordinate interest.
(b) A subordinate interest is discharged or terminated under
subsection (a), even if the secured party fails to comply with
IC 26-1-9.1.
As added by P.L.57-2000, SEC.45.
IC 26-1-9.1-623
Right to redeem collateral
Sec. 623. (a) A debtor, any secondary obligor, or any other
secured party or lienholder may redeem collateral.
(b) To redeem collateral, a person shall tender:
(1) fulfillment of all obligations secured by the collateral; and
(2) the reasonable expenses and attorney's fees described in
IC 26-1-9.1-615(a)(1).
(c) A redemption may occur at any time before a secured party:
(1) has collected collateral under IC 26-1-9.1-607;
(2) has disposed of collateral or entered into a contract for its
disposition under IC 26-1-9.1-610; or
(3) has accepted collateral in full or partial satisfaction of the
obligation it secures under IC 26-1-9.1-622.
As added by P.L.57-2000, SEC.45.
IC 26-1-9.1-624
Waiver
Sec. 624. (a) A debtor or secondary obligor may waive the right
to notification of disposition of collateral under IC 26-1-9.1-611 only
by an agreement to that effect entered into and authenticated after
default.
(b) A debtor may waive the right to require disposition of
collateral under IC 26-1-9.1-620(e) only by an agreement to that
effect entered into and authenticated after default.
(c) Except in a consumer-goods transaction, a debtor or secondary
obligor may waive the right to redeem collateral under
IC 26-1-9.1-623 only by an agreement to that effect entered into and
authenticated after default.
As added by P.L.57-2000, SEC.45.
IC 26-1-9.1-625
Remedies for secured party's failure to comply with chapter
Sec. 625. (a) If it is established that a secured party is not
proceeding in accordance with IC 26-1-9.1, a court may order or
restrain collection, enforcement, or disposition of collateral on
appropriate terms and conditions.
(b) Subject to subsections (c), (d), and (f), a person is liable for
damages in the amount of any loss caused by a failure to comply with
IC 26-1-9.1. Loss caused by a failure to comply may include loss
resulting from the debtor's inability to obtain, or increased costs of,
alternative financing.
(c) Except as otherwise provided in IC 26-1-9.1-628:
(1) a person that, at the time of the failure, was a debtor, was an
obligor, or held a security interest in or other lien on the
collateral may recover damages under subsection (b) for its
loss; and
(2) if the collateral is consumer goods, a person that was a
debtor or a secondary obligor at the time a secured party failed
to comply with IC 26-1-9.1-601 through IC 26-1-9.1-628 may
recover for that failure in any event an amount not less than the
credit service charge plus ten percent (10%) of the principal
amount of the obligation or the time-price differential plus ten
percent (10%) of the cash price.
(d) A debtor whose deficiency is eliminated under
IC 26-1-9.1-626 may recover damages for the loss of any surplus.
However, a debtor or secondary obligor whose deficiency is
eliminated or reduced under IC 26-1-9.1-626 may not otherwise
recover under subsection (b) for noncompliance with the provisions
of IC 26-1-9.1-601 through IC 26-1-9.1-628 relating to collection,
enforcement, disposition, or acceptance.
(e) In addition to any damages recoverable under subsection (b),
the debtor, consumer obligor, or person named as a debtor in a filed
record, as applicable, may recover five hundred dollars ($500) in
each case from a person that:
(1) fails to comply with IC 26-1-9.1-208;
(2) fails to comply with IC 26-1-9.1-209;
(3) files a record that the person is not entitled to file under
IC 26-1-9.1-509(a);
(4) fails to cause the secured party of record to file or send a
termination statement as required by IC 26-1-9.1-513(a) or
IC 26-1-9.1-513(c);
(5) fails to comply with IC 26-1-9.1-616(b)(1) and whose
failure is part of a pattern or consistent with a practice, of
noncompliance;
(6) fails to comply with IC 26-1-9.1-616(b)(2); or
(7) fails to comply with IC 26-1-9.1-502(f).
IC 26-1-9.1-626
Action in which deficiency or surplus is in issue
Sec. 626. In an action arising from a transaction in which the
amount of a deficiency or surplus is in issue, the following rules
apply:
(1) A secured party need not prove compliance with the
provisions of IC 26-1-9.1-601 through IC 26-1-9.1-628 relating
to collection, enforcement, disposition, or acceptance unless the
debtor or a secondary obligor places the secured party's
compliance in issue.
(2) If the secured party's compliance is placed in issue, the
secured party has the burden of establishing that the collection,
enforcement, disposition, or acceptance was conducted in
accordance with IC 26-1-9.1-601 through IC 26-1-9.1-628.
(3) Except as otherwise provided in IC 26-1-9.1-628, if a
secured party fails to prove that the collection, enforcement,
disposition, or acceptance was conducted in accordance with
the provisions of IC 26-1-9.1-601 through IC 26-1-9.1-628
relating to collection, enforcement, disposition, or acceptance,
the liability of a debtor or a secondary obligor for a deficiency
is limited to an amount by which the sum of the secured
obligation, expenses, and attorney's fees exceeds the greater of:
(A) the proceeds of the collection, enforcement, disposition,
or acceptance; or
(B) the amount of proceeds that would have been realized
had the noncomplying secured party proceeded in
accordance with the provisions of IC 26-1-9.1-601 through
IC 26-1-9.1-628 relating to collection, enforcement,
disposition, or acceptance.
(4) For purposes of subdivision (3)(B), the amount of proceeds
that would have been realized is equal to the sum of the secured
obligation, expenses, and attorney's fees unless the secured
party proves that the amount is less than that sum.
(5) If a deficiency or surplus is calculated under
IC 26-1-9.1-615(f), the debtor or obligor has the burden of
establishing that the amount of proceeds of the disposition is
significantly below the range of prices that a complying
disposition to a person other than the secured party, a person
related to the secured party, or a secondary obligor would have
brought.
As added by P.L.57-2000, SEC.45. Amended by P.L.165-2001,
SEC.19.
IC 26-1-9.1-627
Determination of whether conduct was commercially reasonable
Sec. 627. (a) The fact that a greater amount could have been
obtained by a collection, enforcement, disposition, or acceptance at
a different time or in a different method from that selected by the
secured party is not of itself sufficient to preclude the secured party
from establishing that the collection, enforcement, disposition, or
acceptance was made in a commercially reasonable manner.
(b) A disposition of collateral is made in a commercially
reasonable manner if the disposition is made:
(1) in the usual manner on any recognized market;
(2) at the price current in any recognized market at the time of
the disposition; or
(3) otherwise in conformity with reasonable commercial
practices among dealers in the type of property that was the
subject of the disposition.
(c) A collection, enforcement, disposition, or acceptance is
commercially reasonable if it has been approved:
(1) in a judicial proceeding;
(2) by a bona fide creditors' committee;
(3) by a representative of creditors; or
(4) by an assignee for the benefit of creditors.
(d) Approval under subsection (c) need not be obtained, and lack
of approval does not mean that the collection, enforcement,
disposition, or acceptance is not commercially reasonable.
As added by P.L.57-2000, SEC.45.
IC 26-1-9.1-628
Nonliability and limitation on liability of secured party; liability of
secondary obligor
Sec. 628. (a) Unless a secured party knows that a person is a
debtor or obligor, knows the identity of the person, and knows how
to communicate with the person:
(1) the secured party is not liable to the person, or to a secured
party or lienholder that has filed a financing statement against
the person, for failure to comply with IC 26-1-9.1; and
(2) the secured party's failure to comply with IC 26-1-9.1 does
not affect the liability of the person for a deficiency.
(b) A secured party is not liable because of its status as secured
party:
(1) to a person that is a debtor or obligor, unless the secured
party knows:
(A) that the person is a debtor or obligor;
(B) the identity of the person; and
(C) how to communicate with the person; or
(2) to a secured party or lienholder that has filed a financing
statement against a person, unless the secured party knows:
(A) that the person is a debtor; and
(B) the identity of the person.
(c) A secured party is not liable to any person, and a person's
liability for a deficiency is not affected, because of any act or
omission arising out of the secured party's reasonable belief that a
transaction is not a consumer-goods transaction or a consumer
transaction or that goods are not consumer goods, if the secured
party's belief is based on its reasonable reliance on:
(1) a debtor's representation concerning the purpose for which
collateral was to be used, acquired, or held; or
(2) an obligor's representation concerning the purpose for which
a secured obligation was incurred.
(d) A secured party is not liable to any person under
IC 26-1-9.1-625(c)(2) for its failure to comply with IC 26-1-9.1-616.
(e) A secured party is not liable under IC 26-1-9.1-625(c)(2) more
than once with respect to any one secured obligation.
As added by P.L.57-2000, SEC.45.
IC 26-1-9.1-701
Effective date
Sec. 701. IC 26-1-9.1 takes effect on July 1, 2001.
As added by P.L.57-2000, SEC.45.
IC 26-1-9.1-702
Savings clause
Sec. 702. (a) Except as otherwise provided in this section through
section 709 of this chapter, IC 26-1-9.1 applies to a transaction or
lien within its scope, even if the transaction or lien was entered into
or created before IC 26-1-9.1 takes effect.
(b) Except as otherwise provided in subsection (c) and
IC 26-1-9.1-703 through IC 26-1-9.1-709:
(1) transactions and liens that were not governed by IC 26-1-9,
before its repeal, were validly entered into or created before
IC 26-1-9.1 takes effect, and would be subject to IC 26-1-9.1 if
they had been entered into or created after IC 26-1-9.1 takes
effect, and the rights, duties, and interests flowing from those
transactions and liens remain valid after IC 26-1-9.1 takes
effect; and
(2) the transactions and liens may be terminated, completed,
consummated, and enforced as required or permitted by
IC 26-1-9.1 or by the law that otherwise would apply if
IC 26-1-9.1 had not taken effect.
(c) IC 26-1-9.1 does not affect an action, case, or proceeding
commenced before IC 26-1-9.1 takes effect.
IC 26-1-9.1-703
Security interest perfected before effective date
Sec. 703. (a) A security interest that is enforceable immediately
before IC 26-1-9.1 takes effect and would have priority over the
rights of a person that becomes a lien creditor at that time is a
perfected security interest under IC 26-1-9.1 if, when IC 26-1-9.1
takes effect, the applicable requirements for enforceability and
perfection under IC 26-1-9.1 are satisfied without further action.
(b) Except as otherwise provided in IC 26-1-9.1-705, if,
immediately before IC 26-1-9.1 takes effect, a security interest is
enforceable and would have priority over the rights of a person that
becomes a lien creditor at that time, but the applicable requirements
for enforceability or perfection under IC 26-1-9.1 are not satisfied
when IC 26-1-9.1 takes effect, the security interest:
(1) is a perfected security interest for one (1) year after
IC 26-1-9.1 takes effect;
(2) remains enforceable thereafter only if the security interest
becomes enforceable under IC 26-1-9.1-203 before the year
expires; and
(3) remains perfected thereafter only if the applicable
requirements for perfection under IC 26-1-9.1 are satisfied
before the year expires.
As added by P.L.57-2000, SEC.45.
IC 26-1-9.1-704
Security interest unperfected before effective date
Sec. 704. A security interest that is enforceable immediately
before IC 26-1-9.1 takes effect but which would be subordinate to the
rights of a person that becomes a lien creditor at that time:
(1) remains an enforceable security interest for one (1) year
after IC 26-1-9.1 takes effect;
(2) remains enforceable thereafter if the security interest
becomes enforceable under IC 26-1-9.1-203 when IC 26-1-9.1
takes effect or within one (1) year thereafter; and
(3) becomes perfected:
(A) without further action, when IC 26-1-9.1 takes effect if
the applicable requirements for perfection under IC 26-1-9.1
are satisfied before or at that time; or
(B) when the applicable requirements for perfection are
satisfied if the requirements are satisfied after that time.
As added by P.L.57-2000, SEC.45.
IC 26-1-9.1-705
Effectiveness of action taken before effective date
Sec. 705. (a) If action, other than the filing of a financing
statement, is taken before IC 26-1-9.1 takes effect and the action
would have resulted in priority of a security interest over the rights
of a person that becomes a lien creditor had the security interest
become enforceable before IC 26-1-9.1 takes effect, the action is
effective to perfect a security interest that attaches under IC 26-1-9.1
within one (1) year after IC 26-1-9.1 takes effect. An attached
security interest becomes unperfected one (1) year after IC 26-1-9.1
takes effect unless the security interest becomes a perfected security
interest under IC 26-1-9.1 before the expiration of that period.
(b) The filing of a financing statement before IC 26-1-9.1 takes
effect is effective to perfect a security interest to the extent the filing
would satisfy the applicable requirements for perfection under
IC 26-1-9.1.
(c) IC 26-1-9.1 does not render ineffective an effective financing
statement that is filed before IC 26-1-9.1 takes effect and satisfied
the applicable requirements for perfection under the law of the
jurisdiction governing perfection as provided in IC 26-1-9-103,
before its repeal. However, except as otherwise provided in
subsections (d) and (e) and IC 26-1-9.1-706, the financing statement
ceases to be effective at the earlier of:
(1) the time the financing statement would have ceased to be
effective under the law of the jurisdiction in which it is filed; or
(2) June 30, 2006.
(d) The filing of a continuation statement after IC 26-1-9.1 takes
effect does not continue the effectiveness of the financing statement
filed before IC 26-1-9.1 takes effect. However, upon the timely filing
of a continuation statement after IC 26-1-9.1 takes effect and in
accordance with the law of the jurisdiction governing perfection as
provided in IC 26-1-9.1-301 through IC 26-1-9.1-342, the
effectiveness of a financing statement filed in the same office in that
jurisdiction before IC 26-1-9.1 takes effect continues for the period
provided by the law of that jurisdiction.
(e) Subsection (c)(2) applies to a financing statement that is filed
against a transmitting utility before IC 26-1-9.1 takes effect and
satisfied the applicable requirements for perfection under the law of
the jurisdiction governing perfection as provided in IC 26-1-9-103,
before its repeal, only to the extent that IC 26-1-9.1-301 through
IC 26-1-9.1-342 provide that the law of a jurisdiction other than
jurisdiction in which the financing statement is filed governs
perfection of a security interest in collateral covered by the financing
statement.
(f) A financing statement that includes a financing statement filed
before IC 26-1-9.1 takes effect and a continuation statement filed
after IC 26-1-9.1 takes effect is effective only to the extent that it
satisfies the requirements of IC 26-1-9.1-501 through
IC 26-1-9.1-527 for an initial financing statement.
As added by P.L.57-2000, SEC.45. Amended by P.L.165-2001,
SEC.20.
IC 26-1-9.1-706
Filing of initial financing statement; effectiveness of financing
statement
Sec. 706. (a) The filing of an initial financing statement in the
office specified in IC 26-1-9.1-501 continues the effectiveness of a
financing statement filed before IC 26-1-9.1 takes effect if:
(1) the filing of an initial financing statement in that office
would be effective to perfect a security interest under
IC 26-1-9.1;
(2) the pre-effective-date financing statement was filed in an
office in another state or another office in this state; and
(3) the initial financing statement satisfies subsection (c).
(b) The filing of an initial financing statement under subsection
(a) continues the effectiveness of the pre-effective date financing
statement if the initial financing statement is filed:
(1) before IC 26-1-9.1 takes effect, for the period provided in
IC 26-1-9-403 (before its repeal) for a financing statement; and
(2) after IC 26-1-9.1 takes effect, for the period provided in
IC 26-1-9.1-515 for an initial financing statement.
(c) To be effective for purposes of subsection (a), an initial
financing statement must:
(1) satisfy the requirements of IC 26-1-9.1-501 through
IC 26-1-9.1-526 for an initial financing statement;
(2) identify the pre-effective-date financing statement by
indicating the office in which the financing statement was filed
and providing the dates of filing and file numbers, if any, of the
financing statement and of the most recent continuation
statement filed with respect to the financing statement; and
(3) indicate that the pre-effective-date financing statement
remains effective.
As added by P.L.57-2000, SEC.45. Amended by P.L.1-2007,
SEC.183.
IC 26-1-9.1-707
Pre-effective-date financing statement
Sec. 707. (a) In this section, "pre-effective-date financing
statement" means a financing statement filed before IC 26-1-9.1
takes effect.
(b) After IC 26-1-9.1 takes effect, a person may add or delete
collateral covered by, continue, or terminate the effectiveness of, or
otherwise amend the information provided in, a pre-effective-date
financing statement only in accordance with the law of the
jurisdiction governing perfection as provided under IC 26-1-9.1-301
through IC 26-1-9.1-342. However, the effectiveness of a
pre-effective-date financing statement also may be terminated in
accordance with the law of the jurisdiction in which the financing
statement is filed.
(c) Except as otherwise provided in subsection (d), if Indiana law
governs perfection of a security interest, the information in a
pre-effective-date financing statement may be amended after
IC 26-1-9.1 takes effect only if:
(1) the pre-effective date financing statement and an
amendment are filed in the office specified in IC 26-1-9.1-501;
(2) an amendment is filed in the office specified in
IC 26-1-9.1-501 concurrently with, or after the filing in that
office of, an initial financing statement that satisfies
IC 26-1-9.1-706(c); or
(3) an initial financing statement that provides the information
as amended and satisfies IC 26-1-9.1-706(c) is filed in the office
specified in IC 26-1-9.1-501.
(d) If Indiana law governs the perfection of a security interest, the
effectiveness of a pre-effective-date financing statement may be
continued only under IC 26-1-9.1-705(d) and IC 26-1-9.1-705(f) or
IC 26-1-9.1-706.
(e) Whether or not Indiana law governs perfection of a security
interest, the effectiveness of a pre-effective-date financing statement
filed in Indiana may be terminated after IC 26-1-9.1 takes effect by
filing a termination statement in the office in which the
pre-effective-date financing statement is filed, unless an initial
financing statement that satisfies IC 26-1-9.1-706(c) has been filed
in the office specified by the law of the jurisdiction governing
perfection in IC 26-1-9.1-301 through IC 26-1-9.1-342 as the office
in which to file a financing statement.
As added by P.L.57-2000, SEC.45.
IC 26-1-9.1-708
Persons entitled to file initial financing statement or continuation
statement
Sec. 708. A person may file an initial financing statement or a
continuation statement under IC 26-1-9.1-701 through
IC 26-1-9.1-709 if:
(1) the secured party of record authorizes the filing; and
(2) the filing is necessary under IC 26-1-9.1-701 through
IC 26-1-9.1-709:
(A) to continue the effectiveness of a financing statement
filed before IC 26-1-9.1 takes effect; or
(B) to perfect or continue the perfection of a security
interest.
As added by P.L.57-2000, SEC.45.
IC 26-1-9.1-709
Priority
Sec. 709. (a) IC 26-1-9, before its repeal, determines the priority
of conflicting claims to collateral if the relative priorities of the
claims were established before IC 26-1-9.1 takes effect. In other
cases, IC 26-1-9.1 determines priority.
(b) For purposes of IC 26-1-9.1-322(a), the priority of a security
interest that becomes enforceable under IC 26-1-9.1-203 dates from
the time IC 26-1-9.1 takes effect if the security interest is perfected
under IC 26-1-9.1 by the filing of a financing statement before
IC 26-1-9.1 takes effect which would not have been effective to
perfect the security interest under IC 26-1-9, before its repeal. This
subsection does not apply to conflicting security interests each of
which is perfected by the filing of such a financing statement.
IC 26-1-9.1-801
Transactions or liens entered into or created before July 1, 2013
Effective 7-1-2013.
Sec. 801. (a) Except as otherwise provided in this section through
IC 26-1-9.1-808, amendments to this chapter made by P.L.54-2011
apply to a transaction or lien with its scope, even if the transaction or
lien was entered into or created before the amendments to this
chapter made by P.L.54-2011 take effect (July 1, 2013).
(b) The amendments to this chapter made by P.L.54-2011 do not
affect an action, case, or proceeding commenced before the
amendments to this chapter made by P.L.54-2011 take effect (July 1,
2013).
As added by P.L.54-2011, SEC.20. Amended by P.L.6-2012,
SEC.178.
IC 26-1-9.1-802
Security interest perfected before July 1, 2013
Effective 7-1-2013.
Sec. 802. (a) A security interest that is a perfected security interest
immediately before the amendments to this chapter made by
P.L.54-2011 take effect (July 1, 2013) is a perfected security interest
under this chapter, as amended by P.L.54-2011 if, when the
amendments to this chapter made by P.L.54-2011 take effect (July 1,
2013), the applicable requirements for attachment and perfection
under this chapter, as amended by P.L.54-2011, are satisfied without
further action.
(b) Except as otherwise provided in IC 26-1-9.1-804, if,
immediately before the amendments to this chapter made by
P.L.54-2011 take effect (July 1, 2013), a security interest is a
perfected security interest, but the applicable requirements for
perfection under this chapter, as amended by P.L.54-2011, are not
satisfied when the amendments to this chapter made by P.L.54-2011
take effect (July 1, 2013), the security interest remains perfected
thereafter only if the applicable requirements for perfection under
this chapter, as amended by P.L.54-2011, are satisfied within one (1)
year after the amendments to this chapter made by P.L.54-2011 take
effect (July 1, 2013).
As added by P.L.54-2011, SEC.21. Amended by P.L.6-2012,
SEC.179.
IC 26-1-9.1-803
Security interest unperfected before July 1, 2013
Effective 7-1-2013.
Sec. 803. A security interest that is an unperfected security
interest immediately before the amendments to this chapter made by
P.L.54-2011 take effect (July 1, 2013) becomes a perfected security
interest:
(1) without further action, when the amendments to this chapter
made by P.L.54-2011 take effect (July 1, 2013) if the applicable
requirements for perfection under this chapter, as amended by
P.L.54-2011, are satisfied before or at that time; or
(2) when the applicable requirements for perfection are satisfied
if the requirements are satisfied after this time.
As added by P.L.54-2011, SEC.22. Amended by P.L.6-2012,
SEC.180.
IC 26-1-9.1-804
Effectiveness of action taken before July 1, 2013
Effective 7-1-2013.
Sec. 804. (a) The filing of a financing statement before the
amendments to this chapter made by P.L.54-2011 take effect (July 1,
2013) is effective to perfect a security interest to the extent the filing
would satisfy the applicable requirements for perfection under this
chapter, as amended by P.L.54-2011.
(b) The amendments to this chapter made by P.L.54-2011 do not
render ineffective an effective financing statement that, before the
amendments to this chapter made by P.L.54-2011 take effect (July 1,
2013), is filed and satisfies the applicable requirements for perfection
under the law of the jurisdiction governing perfection provided in
this chapter as it existed before it was amended by P.L.54-2011.
However, except as otherwise provided in subsections (c) and (d) and
IC 26-1-9.1-805, the financing statement ceases to be effective:
(1) if the financing statement is filed in this state, at the time the
financing statement would have ceased to be effective had the
amendments to this chapter made by P.L.54-2011 not taken
effect; or
(2) if the financing statement is filed in another jurisdiction, at
the earlier of:
(A) the time the financing statement would have ceased to be
effective under the law of that jurisdiction; or
(B) June 30, 2018.
(c) The filing of a continuation statement after the amendments to
this chapter made by P.L.54-2011 take effect (July 1, 2013) does not
continue the effectiveness of a financing statement filed before the
amendments to this chapter made by P.L.54-2011 take effect (July 1,
2013). However, upon the timely filing of a continuation statement
after the amendments to this chapter made by P.L.54-2011 take effect
(July 1, 2013) and in accordance with the law of the jurisdiction
governing perfection as provided in this chapter as amended by
P.L.54-2011, the effectiveness of a financing statement filed in the
same office in that jurisdiction before the amendments to this chapter
made by P.L.54-2011 take effect (July 1, 2013) continues for the
period provided by the law of that jurisdiction.
(d) Subsection (b)(2)(B) applies to a financing statement that,
before the amendments to this chapter made by P.L.54-2011 take
effect (July 1, 2013), is filed against a transmitting utility and
satisfies the applicable requirements for perfection under the law of
the jurisdiction governing perfection as provided in this chapter as it
existed before it was amended by P.L.54-2011, only to the extent that
this chapter, as amended by P.L.54-2011, provides that the law of a
jurisdiction other than the jurisdiction in which the financing
statement is filed governs perfection of a security interest in
collateral covered by the financing statement.
(e) A financing statement that includes a financing statement filed
before the amendments to this chapter made by P.L.54-2011 take
effect (July 1, 2013) and a continuation statement filed after the
amendments to this chapter made by P.L.54-2011 take effect (July 1,
2013) is effective only to the extent that it satisfies the requirements
of IC 26-1-9.1-501 through IC 26-1-9.1-527, as amended by
P.L.54-2011, for an initial financing statement. A financing statement
that indicates that the debtor is a decedent's estate indicates that the
collateral is being administered by a personal representative within
the meaning of IC 26-1-9.1-503(a)(2), as amended by P.L.54-2011.
A financing statement that indicates that the debtor is a trust or is a
trustee acting with respect to property held in trust indicates that the
collateral is held in a trust within the meaning of
IC 26-1-9.1-503(a)(3) as amended by P.L.54-2011.
As added by P.L.54-2011, SEC.23. Amended by P.L.6-2012,
SEC.181.
IC 26-1-9.1-805
When initial financing statement suffices to continue effectiveness
of financing statement
Effective 7-1-2013.
Sec. 805. (a) The filing of an initial financing statement in the
office specified in IC 26-1-9.1-501 continues the effectiveness of a
financing statement filed before the amendments to this chapter made
by P.L.54-2011 take effect (July 1, 2013) if:
(1) the filing of an initial financing statement in that office
would be effective to perfect a security interest under this
chapter, as amended by P.L.54-2011;
(2) the pre-effective-date financing statement was filed in an
office in another state; and
(3) the initial financing statement satisfies subsection (c).
(b) The filing of an initial financing statement under subsection
(a) continues the effectiveness of the pre-effective-date financing
statement:
(1) if the initial financing statement is filed before the
amendments to this chapter made by P.L.54-2011 take effect
(July 1, 2013), for the period provided in IC 26-1-9.1-515,
before it was amended by P.L.54-2011, with respect to an initial
financing statement; and
(2) if the initial financing statement is filed after the
amendments to this chapter made by P.L.54-2011 take effect
(July 1, 2013), for the period provided in IC 26-1-9.1-515, as
amended by P.L.54-2011 with respect to an initial financing
statement.
(c) To be effective for purposes of subsection (a), an initial
financing statement must:
(1) satisfy the requirements of IC 26-1-9.1-501 through
IC 26-1-9.1-527, as amended by P.L.54-2011 for an initial
financing statement;
(2) identify the pre-effective-date financing statement by
indicating the office in which the financing statement was filed
and providing the dates of filing and file numbers, if any, of the
financing statement and of the most recent continuation
statement filed with respect to the financing statement; and
(3) indicate that the pre-effective-date financing statement
remains effective.
As added by P.L.54-2011, SEC.24. Amended by P.L.6-2012,
SEC.182.
IC 26-1-9.1-806
Amendment of financing statement filed before July 1, 2013
Effective 7-1-2013.
Sec. 806. (a) In this section, "pre-effective-date financing
statement" means a financing statement filed before the amendments
to this chapter made by P.L.54-2011 take effect (July 1, 2013).
(b) After the amendments to this chapter made by P.L.54-2011
take effect (July 1, 2013), a person may add or delete collateral
covered by, continue or terminate the effectiveness of, or otherwise
amend the information provided in, a pre-effective-date financing
statement only in accordance with the law of the jurisdiction
governing perfection as provided in this chapter, as amended by
P.L.54-2011. However, the effectiveness of a pre-effective-date
financing statement also may be terminated in accordance with the
law of the jurisdiction in which the financing statement is filed.
(c) Except as otherwise provided in subsection (d), if the law of
this state governs perfection of a security interest, the information in
a pre-effective-date financing statement may be amended after the
amendments to this chapter made by P.L.54-2011 take effect (July 1,
2013) only if:
(1) the pre-effective-date financing statement and an
amendment are filed in the office specified in IC 26-1-9.1-501;
(2) an amendment is filed in the office specified in
IC 26-1-9.1-501 concurrently with, or after the filing in that
office of, an initial financing statement that satisfies
IC 26-1-9.1-805(c); or
(3) an initial financing statement that provides the information
as amended and satisfies IC 26-1-9.1-805(c) is filed in the office
specified in IC 26-1-9.1-501.
(d) If the law of this state governs perfection of a security interest,
the effectiveness of a pre-effective-date financing statement may be
continued only under IC 26-1-9.1-804(c) and IC 26-1-9.1-804(e) or
IC 26-1-9.1-805.
(e) Whether or not the law of this state governs perfection of a
security interest, the effectiveness of a pre-effective-date financing
statement filed in this state may be terminated after the amendments
to this chapter made by P.L.54-2011 take effect (July 1, 2013) by
filing a termination statement in the office in which the
pre-effective-date financing statement is filed, unless an initial
financing statement that satisfies IC 26-1-9.1-805(c) has been filed
in the office specified by the law of the jurisdiction governing
perfection as provided in this chapter, as amended by P.L.54-2011,
as the office in which to file a financing statement.
As added by P.L.54-2011, SEC.25. Amended by P.L.6-2012,
SEC.183.
IC 26-1-9.1-807
Person entitled to file initial financing statement or continuation
statement
Effective 7-1-2013.
Sec. 807. A person may file an initial financing statement or a
continuation statement under this chapter if:
(1) the secured party of record authorizes the filing; and
(2) the filing is necessary under this chapter:
(A) to continue the effectiveness of a financing statement
filed before the amendments to this chapter made by
P.L.54-2011 take effect (July 1, 2013); or
(B) to perfect or continue the perfection of a security
interest.
As added by P.L.54-2011, SEC.26. Amended by P.L.6-2012,
SEC.184.
IC 26-1-9.1-808
Priority
Effective 7-1-2013.
Sec. 808. The amendments to this chapter made by P.L.54-2011
determine the priority of conflicting claims to collateral. However,
if the relative priorities of the claims were established before the
amendments to this chapter made by P.L.54-2011 take effect (July 1,
2013), this chapter, as it existed before amendments to this chapter
made by P.L.54-2011, determines priority.
As added by P.L.54-2011, SEC.27. Amended by P.L.6-2012,
SEC.185.