Collateral Release Letter for the United States

Collateral Release Letter Template for United States

A Collateral Release Letter is a formal document used in the United States to release a security interest in specified collateral that was previously pledged to secure a loan or other obligation. The document, governed by Article 9 of the Uniform Commercial Code and relevant state laws, provides written confirmation that the lender no longer claims any right or interest in the specified collateral. It typically includes details of the original security agreement, specific description of the released collateral, and may require filing with appropriate state offices.

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What is a Collateral Release Letter?

A Collateral Release Letter is essential when a borrower has satisfied their obligations or when a lender agrees to release specific collateral from a security agreement. This document, commonly used in U.S. secured transactions, provides formal evidence that the security interest has been terminated and the collateral is free from encumbrance. The letter must comply with UCC requirements and state-specific regulations, and may need to be filed with appropriate government offices. It's particularly important for maintaining clear title records and facilitating future transactions involving the released collateral.

What sections should be included in a Collateral Release Letter?

1. Date and Parties: Identification of lender releasing collateral and borrower/debtor

2. Reference to Original Agreement: Details of the original security agreement or loan document

3. Collateral Description: Specific description of collateral being released

4. Release Statement: Explicit statement releasing security interest in the collateral

5. Effective Date: When the release becomes effective

6. Authorization: Statement of authority to release the collateral

What sections are optional to include in a Collateral Release Letter?

1. Partial Release Statement: Used when only portion of collateral is being released

2. Continuing Obligations: Reference to obligations that remain in effect

3. Recording Instructions: Include when release needs to be recorded with public office

What schedules should be included in a Collateral Release Letter?

1. Original Security Agreement: Copy of the agreement under which the security interest was created

2. UCC Filing Details: Information about original UCC filings and amendments

3. Property Description Schedule: Detailed description of released collateral if complex

Authors

Alex Denne

Head of Growth (Open Source Law) @ Genie AI | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Jurisdiction

United States

Publisher

Genie AI

Document Type

Release of Lien

Cost

Free to use
Industries

Uniform Commercial Code (UCC): Primary framework governing secured transactions, particularly Article 9, which covers secured transactions, release of security interests, and requirements for termination statements

State-Specific Secured Transaction Laws: Variations of UCC adopted by different states, including state-specific filing, recording, and notice requirements for secured transactions and releases

Federal Laws: Regulations concerning federal interests, registrations, federal tax liens, and bankruptcy code provisions that may affect collateral release

Property Laws: State and federal regulations governing real and personal property, including state recording statutes that affect how property interests are documented and released

Banking Regulations: Requirements from banking institutions, Federal Reserve regulations, and FDIC requirements that may apply to collateral release processes

Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks,  Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination,  Severance Pay, Governing Law, Entire Agreemen

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