Continuation Statement - Definition
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What is a Continuation Statement?
A continuation statement refers to modification or alteration made to a UCC-1 (financing statement) which makes it effective beyond its normal expiration date. The effect of a continuation statement is that a lien placed by a lender on the collateral of a borrower is extended beyond the original expiration date identified in the UCC-1 financing statement. Continuation statements are otherwise called UCC-3 continuation statements.
As stipulated in section 9 of Uniform Commercial Code, the continuation statement must be filed six months before the UCC-1 expires. A timely filing allows the extension of a financing statement five years after its filing date.
Lenders who do not file at this time are denied any extension or amendment to the expiration date of the financing statement.