How can a credit union maintain their security interest on collateral after a financing statement expires?

A credit union can maintain its security interest on collateral after a financing statement expires by filing continuation statements within six months of expiration. This practice is essential in commercial financing as it ensures that the credit union's interest in the collateral remains valid and enforceable after the initial financing statement has lapsed.

Filing a continuation statement effectively extends the duration of the original filing. This is crucial because, without it, the security interest may no longer be perfected, putting the credit union at risk if the borrower defaults or encounters financial difficulties. By adhering to the specific time frame for filing continuation statements—within six months of expiration—the credit union can safeguard its legal claim to the collateral and maintain priority over other creditors.

Other options do not adequately address the maintenance of a security interest after expiration. For instance, while filing a new financing statement could create a new interest, it may not provide the same priority as the original statement. A waiver from the borrower does not prevent the expiration of the financing statement, and initiating bankruptcy proceedings is unrelated to maintaining a security interest in the collateral.