When must a continuation statement be filed to maintain perfection of a security interest in most UCC-recorded collateral?

• A. At the time of the initial filing.
• B. After the collateral is repossessed.
• C. Ten days after the five-year expiration.
• D. Within six months before the five-year expiration of the financing statement, to extend perfection for another five years if needed.

Answer: (D)

The essential idea is how to keep a secured party’s interest perfected after the initial five-year life of a financing statement. Under UCC Article 9, a financing statement remains in effect for five years. To maintain perfection beyond that, you must file a continuation statement within the six months leading up to the five-year expiration. When you file during that window, the continuation extends the term of perfection for another five years from the original expiration date, so the secured party doesn’t lose priority.

That’s why the answer is the best fit: it specifies the exact timing window—within six months before the five-year anniversary—and notes that this continuation can extend perfection for another five years if needed. Filing at the time of the initial filing only covers the first five years and does not extend perfection. Filing after repossession has no bearing on the continuation of perfection, and filing six days or ten days after expiration would leave the lien unperfected. The six-month-before-expiration rule is the precise mechanism to prevent lapse.