Question

Maddie enters into a secured consumer debt transaction with Friendly Bank. When Maddie pays the loan in full, Friendly Bank is required to file a statement indicating that it no longer claims a secured interest in the collateral. This statement must be filed within one month from the date the debt is fully paid.
A. True
B. False

Answer 1

Answer:

true

Explanation:

Before Friendly Bank handed out the loan to Maddie, it had to perfect an interest on the collateral or security of the loan, and it did it by filing a Form UCC-1.

After the loan is repaid, the bank's interest on the security ceases to exist and it must file a UCC termination statement notifying that the collateral is "free and clear".