It is not a topic many people want to think about, but what happens if you do custom work for a farmer and you do not get paid? Every state has various laws to deal with this scenario. Nebraska and South Dakota have a number of different liens that may be filed, as every state does.
Nebraska requires most individuals filing a lien to do so through a financing statement. A financing statement is part of Article 9 of the Uniform Commercial Code. What is a financing statement in Article 9 of the Uniform Commercial Code? It is a form that a creditor (here, the person filing the lien) files to give notice that the creditor may have an interest in the personal property of a debtor (the person who owes the creditor money). The filing allows the creditor to “perfect” his or her interest, meaning that the creditor has an interest in specific property which would then be given a specific place in the priority of creditors to be paid.
The Nebraska Secretary of State is where financing statements are filed. To obtain a financing statement to file, the Nebraska Secretary of State provides the form to fill out. There is a filing fee to file the financing statement; the fees are listed here.
Keep in mind that a financing statement is effective for five years after the date of filing and is considered lapsed. A continuation statement may be filed within six months of the expiration of the five year period. Should the financing statement lapse, the lien will no longer be perfected, meaning your place in the priority for payment will be considered to have never existed.
In summary, know what type of lien is applicable to you and whether you must file a financing statement. If you need assistance answering these questions, contact us!
South Dakota does not have the Uniform Commercial Code requirements that Nebraska has. In South Dakota, the county Register of Deeds is where liens are filed. The procedures under the Uniform Commercial Code are not applicable in South Dakota for agricultural liens.
But just like Nebraska residents, if you have a question about liens, feel free to contact us!