Section 9--513. Termination Statement.(a) Consumer goods. 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) Time for compliance with subsection (a). To comply with subsection (a), a secured party shall cause the secured party of record to file the termination statement:
(1) within one 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 20 days after the secured party receives
an authenticated demand from a debtor.
(c) Other collateral. In cases not governed by subsection (a), within 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) Effect of filing termination statement. Except as otherwise provided in Section 9--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 Section 9--510, for purposes of Section 9--519(g), 9--522(a), and 9--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.
(e) Cooperative Interests.
(1) "Cooperative Interest Settlement" means the time and place at
which an owner of a cooperative interest transfers the
cooperative interest, or refinances or pays off the debt
secured by the cooperative interest.
(2) Upon an authenticated demand with sufficient notice by a
debtor, the secured party shall deliver to a cooperative
interest settlement a termination statement or partial
release and any component of the cooperative record of which
it took possession, which shall be released to the debtor
upon payment of the debt secured by the cooperative interest
and the discharge of any obligation of the secured party to
make further advances. Unless the secured party has agreed
otherwise or the cooperative interest settlement takes place
at the offices of the secured party, the secured party or its
agent shall be entitled to a reasonable fee for attendance at
the cooperative interest settlement.
(3) Upon payment of the debt secured by a cooperative interest
other than at a cooperative interest settlement and the
discharge of any obligation of the secured party to make
further advances, the secured party shall arrange for a
termination statement or partial release to be filed within
one month of receipt of the payment or discharge of the
obligation to make further advances, whichever is later, and
shall send to the debtor any component of the cooperative
record of which it took possession.
Last modified: February 3, 2019