Chapter 409

409.505 History History: 2001 a. 10.

409.506 409.506 Effect of errors or omissions.

409.506(1) (1) Minor errors and omissions. A financing statement substantially satisfying the requirements of this subchapter is effective, even if it has minor errors or omissions, unless the errors or omissions make the financing statement seriously misleading.

409.506(2) (2) Financing statement seriously misleading. Except as otherwise provided in sub. (3), a financing statement that fails sufficiently to provide the name of the debtor in accordance with s. 409.503 (1) is seriously misleading.

409.506(3) (3) Financing statement not seriously misleading. 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 sufficiently to provide the name of the debtor in accordance with s. 409.503 (1), the name provided does not make the financing statement seriously misleading.

409.506(4) (4) Debtor’s correct name. For purposes of s. 409.508 (2), the “debtor’s correct name” in sub. (3) means the correct name of the new debtor.

409.506 History History: 2001 a. 10.

409.506 Annotation A creditor’s financing statement became “seriously misleading” after the debtors’ name change and so was insufficient to perfect a security interest in property acquired more than 4 months after the name change. First Agri Services, Inc. v. Kahl, 129 Wis. 2d 464, 385 N.W.2d 191 (Ct. App. 1986).

409.506 Annotation A wrong statement of section, township, range, and county where crops were grown was not minor, and, without directing further inquiry, was insufficient. Whether a party is misled by the description is not part of the inquiry under s. 409.110 or 409.402. Smith & Spindahl Enterprises, Inc. v. Lee, 206 Wis. 2d 663, 557 N.W.2d 865 (Ct. App. 1996), 96-0882.

409.506 Note NOTE: The above annotated materials cite to the pre-2001 Wis. Act 10 version of ch. 409.

409.507 409.507 Effect of certain events on effectiveness of financing statement.

409.507(1) (1) Disposition. 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.

409.507(2) (2) Information becoming seriously misleading. Except as otherwise provided in sub. (3) and s. 409.508, 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 s. 409.506.

409.507(3) (3) Change in debtor’s name. If the name that a filed financing statement provides for a debtor becomes insufficient as the name of the debtor under s. 409.503 (1) so that the financing statement becomes seriously misleading under s. 409.506:

409.507(3)(a) (a) The financing statement is effective to perfect a security interest in collateral acquired by the debtor before, or within 4 months after, the filed financing statement becomes seriously misleading; and

409.507(3)(b) (b) The financing statement is not effective to perfect a security interest in collateral acquired by the debtor more than 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 4 months after the financing statement became seriously misleading.

409.507 History History: 2001 a. 10; 2011 a. 206.

409.508 409.508 Effectiveness of financing statement if new debtor becomes bound by security agreement.

409.508(1) (1) Financing statement naming original debtor. 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.

409.508(2) (2) Financing statement becoming seriously misleading. 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 sub. (1) to be seriously misleading under s. 409.506:

409.508(2)(a) (a) The financing statement is effective to perfect a security interest in collateral acquired by the new debtor before, and within 4 months after, the new debtor becomes bound under s. 409.203 (4); and

409.508(2)(b) (b) The financing statement is not effective to perfect a security interest in collateral acquired by the new debtor more than 4 months after the new debtor becomes bound under s. 409.203 (4) unless an initial financing statement providing the name of the new debtor is filed before the expiration of that time.

409.508(3) (3) When section not applicable. This section does not apply to collateral as to which a filed financing statement remains effective against the new debtor under s. 409.507 (1).

409.508 History History: 2001 a. 10.

409.509 409.509 Persons entitled to file a record.

409.509(1) (1) Person entitled to file record. 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:

409.509(1)(a) (a) The debtor authorizes the filing in an authenticated record or pursuant to sub. (2) or (3); or

409.509(1)(b) (b) 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.

409.509(2) (2) Security agreement as authorization. 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:

409.509(2)(a) (a) The collateral described in the security agreement; and

409.509(2)(b) (b) Property that becomes collateral under s. 409.315 (1) (b), whether or not the security agreement expressly covers proceeds.

409.509(3) (3) Acquisition of collateral as authorization. By acquiring collateral in which a security interest or agricultural lien continues under s. 409.315 (1) (a), a debtor authorizes the filing of an initial financing statement, and an amendment, covering the collateral and property that becomes collateral under s. 409.315 (1) (b).

409.509(4) (4) Person entitled to file certain amendments. 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:

409.509(4)(a) (a) The secured party of record authorizes the filing; or

409.509(4)(b) (b) 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 s. 409.513 (1) or (3), the debtor authorizes the filing, and the termination statement indicates that the debtor authorized it to be filed.

409.509(5) (5) Multiple secured parties of record. If there is more than one secured party of record for a financing statement, each secured party of record may authorize the filing of an amendment under sub. (4).

409.509 History History: 2001 a. 10.

409.510 409.510 Effectiveness of filed record.

409.510(1) (1) Filed record effective if authorized. A filed record is effective only to the extent that it was filed by a person that may file it under s. 409.509.

409.510(2) (2) Authorization by one secured party of record. A record authorized by one secured party of record does not affect the financing statement with respect to another secured party of record.

409.510(3) (3) Continuation statement not timely filed. A continuation statement that is not filed within the 6-month period prescribed by s. 409.515 (4) is ineffective.

409.510 History History: 2001 a. 10.

409.511 409.511 Secured party of record.

409.511(1) (1) Secured party of record. 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 s. 409.514 (1), the assignee named in the initial financing statement is the secured party of record with respect to the financing statement.

409.511(2) (2) Amendment naming secured party of record. If an amendment of a financing statement which 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 s. 409.514 (2), the assignee named in the amendment is a secured party of record.

409.511(3) (3) Amendment deleting secured party of record. A person remains a secured party of record until the filing of an amendment of the financing statement which deletes the person.

409.511 History History: 2001 a. 10.

409.512 409.512 Amendment of financing statement.

409.512(1) (1) Amendment of information in financing statement. Subject to s. 409.509, a person may add or delete collateral covered by, continue or terminate the effectiveness of, or, subject to sub. (5), otherwise amend the information provided in, a financing statement by filing an amendment that:

409.512(1)(a) (a) Identifies, by its file number, the initial financing statement to which the amendment relates; and

409.512(1)(b) (b) If the amendment relates to an initial financing statement filed or recorded in a filing office described in s. 409.501 (1) (a), provides the date on which the initial financing statement was filed or recorded and the information specified in s. 409.502 (2).

409.512(2) (2) Period of effectiveness not affected. Except as otherwise provided in s. 409.515, the filing of an amendment does not extend the period of effectiveness of the financing statement.

409.512(3) (3) Effectiveness of amendment adding collateral. 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.

409.512(4) (4) Effectiveness of amendment adding debtor. 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.

409.512(5) (5) Certain amendments ineffective. An amendment is ineffective to the extent that it:

409.512(5)(a) (a) Purports to delete all debtors and fails to provide the name of a debtor to be covered by the financing statement; or

409.512(5)(b) (b) Purports to delete all secured parties of record and fails to provide the name of a new secured party of record.

409.512 History History: 2001 a. 10.

409.513 409.513 Termination statement.

409.513(1) (1) 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:

409.513(1)(a) (a) 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

409.513(1)(b) (b) The debtor did not authorize the filing of the initial financing statement.

409.513(2) (2) Time for compliance with sub. (1). To comply with sub. (1), a secured party shall cause the secured party of record to file the termination statement:

409.513(2)(a) (a) 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

409.513(2)(b) (b) If earlier, within 20 days after the secured party receives an authenticated demand from a debtor.

409.513(3) (3) Other collateral. In cases not governed by sub. (1), 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:

409.513(3)(a) (a) 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;

409.513(3)(b) (b) 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;

409.513(3)(c) (c) The financing statement covers goods that were the subject of a consignment to the debtor but are not in the debtor’s possession; or

409.513(3)(d) (d) The debtor did not authorize the filing of the initial financing statement.

409.513(4) (4) Effect of filing termination statement. Except as otherwise provided in s. 409.510, 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 s. 409.510, for the purposes of ss. 409.519 (7), 409.522 (1), and 409.523 (3), 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.

409.513 History History: 2001 a. 10.

409.514 409.514 Assignment of powers of secured party of record.

409.514(1) (1) Assignment reflected on initial financing statement. Except as otherwise provided in sub. (3), 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.

409.514(2) (2) Assignment of filed financing statement. Except as otherwise provided in sub. (3), 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:

409.514(2)(a) (a) Identifies, by its file number, the initial financing statement to which it relates;

409.514(2)(b) (b) Provides the name of the assignor; and

409.514(2)(c) (c) Provides the name and mailing address of the assignee.

409.514(3) (3) Assignment of record of mortgage. 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 s. 409.502 (3) may be made only by an assignment of record of the mortgage in the manner provided by law of this state other than chs. 401 to 411.

409.514 History History: 2001 a. 10.

409.515 409.515 Duration and effectiveness of financing statement; effect of lapsed financing statement.

409.515(1) (1) Five-year effectiveness. Except as otherwise provided in subs. (2), (5), (6), and (7), a filed financing statement is effective for a period of 5 years after the date of filing.

409.515(2) (2) Public-finance or manufactured-home transaction. Except as otherwise provided in subs. (5), (6), and (7), an initial financing statement filed in connection with a public-finance transaction or manufactured-home transaction is effective for a period of 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.

409.515(3) (3) Lapse and continuation of financing statement. 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 sub. (4). 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 deemed never to have been perfected as against a purchaser of the collateral for value.

409.515(4) (4) When continuation statement may be filed. A continuation statement may be filed only within 6 months before the expiration of the 5-year period specified in sub. (1) or the 30-year period specified in sub. (2), whichever is applicable.

409.515(5) (5) Effect of filing continuation statement. Except as otherwise provided in s. 409.510, upon timely filing of a continuation statement, the effectiveness of the initial financing statement continues for a period of 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 5-year period, the financing statement lapses in the same manner as provided in sub. (3), unless, before the lapse, another continuation statement is filed pursuant to sub. (4). Succeeding continuation statements may be filed in the same manner to continue the effectiveness of the initial financing statement.

409.515(6) (6) Transmitting utility financing statement. If a debtor is a transmitting utility and a filed initial financing statement so indicates, the financing statement is effective until a termination statement is filed.

409.515(7) (7) Record of mortgage as financing statement. A record of a mortgage that is effective as a financing statement filed as a fixture filing under s. 409.502 (3) 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.

409.515 History History: 2001 a. 10; 2011 a. 206.