What are additional debtors?

Additional debtors are other persons ore companies liable for the debt carrying the note for which the lien was placed. John Deere is notorious for naming the owner of the company as additional debtor on their liens. It is another level of security if the business fails to make the payments.

I have frequently found that, for instance, when searching a company name the owner is the additional debtor. When searching the owner, the company may show up as the additional debtor on a filing which does not appear in the original search of the company.  Got that?

To make it simpler: Smith Equipment is the company searched. Lien numbers 101,102,103,104,105 are filed on Smith Equipment.  Jon Smith is an additional debtor on lien 105.

When searching Jon Smith liens 105, 106 107, 108 are filed on Jon Smith. Smith Equipment shows up on 105, as it should, but also shows up on 108.

108 didn’t appear in the original search of the company.

When you have the option of searching additional debtors, it is safest to do so. Unless you believe everything pertinent to your deal is in the original search.

Search conducted by GroundClearanceLLC.com