A termination statement is filed when the secured party wishes to claim the collateral because the debt has not been paid.

Question

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A termination statement is filed to officially release the security interest in the collateral once the debt has been fully paid off or otherwise satisfied. If the debt has not been paid, the secured party would typically file a notice of default or initiate legal action to recover the collateral.

A Termination Statement Is Filed When the Secured Party Wishes