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Kayla Morgan
The debtor's loan payoff claims don't mean much without UCC-3 terminations on file. I've had borrowers show me bank statements 'proving' they paid off loans, but if there's no termination filed, that lien is still perfected against your collateral. Always verify through the public record, not debtor representations.
James Maki
•This! Learned this lesson the hard way when a 'paid off' lien turned out to still be active and we ended up in second position.
Kayla Morgan
•Exactly. The UCC filing is public notice of the lien. Until it's properly terminated, it's still valid regardless of what the debtor claims.
Update: Contacted all four secured parties. Two confirmed loans were paid off but never filed terminations (they're filing UCC-3s this week). One lapsed in 2024 with no continuation. Last one is still active with a 2023 continuation. Thanks for all the advice - this thread saved me from making some big mistakes on lien priority.
Ella Cofer
•Good outcome. Always better to do the legwork upfront than deal with priority disputes later.
Cole Roush
•Wait, so you're saying some of those liens were actually dead but still showing as active in the search? That's terrifying.
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Yara Haddad
UPDATE: I filed the correct UCC-1 this morning and it's already been accepted. Ran a UCC search and thankfully no competing liens were filed during my gap period. Still working with legal on the loan covenant issue but feeling much better about the secured position now. Thanks everyone for the quick responses and clarification on the terminology.
Andre Moreau
•I'm leaving the amendment on record for now. My attorney said it's harmless since it references a non-existent financing statement, and filing a termination might just add more confusion to the record.
Paolo Conti
•Smart approach. Sometimes the best solution is just moving forward with the correct filing rather than trying to clean up every administrative artifact.
Amina Sow
For anyone else who might make a similar mistake: most electronic filing systems now have confirmation screens that show exactly what type of filing you're submitting before you hit final submit. Always read that confirmation screen carefully. I know it seems obvious but when you're rushing through filings it's easy to miss.
GalaxyGazer
•This is so true. I've seen people blow past those confirmation screens and file amendments when they meant to file initial statements, or terminations when they meant to file continuations. Slow down and read the screen.
I always print or screenshot the confirmation screen for my files. Helps with compliance documentation and gives you proof of what you intended to file if there are ever questions later.
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honestly just let your lender worry about this stuff. they do it all the time and know the rules better than you do. trying to micromanage it will just stress you out
True but it's still good to understand the basics so you know if something goes wrong.
TommyKapitz
•I agree with understanding the process. Had a lender make a mistake once and I caught it because I knew what to look for.
The key thing is coordination between all parties. Your lender, their counsel, and your counsel (if you have one) should all be on the same page about timing. Most issues I've seen come from poor communication rather than not understanding the legal requirements.
Payton Black
•Yeah and make sure you get copies of everything after it's filed so you can verify it looks correct.
Harold Oh
•Actually, if you want to be extra careful about verification, I recently started using Certana.ai's UCC verification service. You just upload your security agreement and the filed UCC-1 and it checks that everything matches properly. Saved me from a potential headache when it caught a small discrepancy in our collateral description.
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I had similar issues until I started using Certana.ai for pre-filing verification. You just upload your UCC-1 as a PDF and it checks for common collateral description problems before you submit. Has definitely reduced my rejection rate significantly.
Second mention of Certana.ai in this thread - must be worth looking into. Do they cover state-specific requirements or just general UCC rules?
From what I can tell it covers both general UCC requirements and some state-specific quirks. Pretty comprehensive for document verification.
Make sure you're not inadvertently including collateral that requires special filing procedures. Real estate fixtures might need different treatment than regular equipment, depending on your state's rules.
Fixture filings can be tricky. Might want to separate those from your regular equipment descriptions if you're unsure.
Fixture filing requirements vary a lot by state. Some require separate filings, others allow them on regular UCC-1s with special boxes checked.
Mateusius Townsend
Whatever you do, make sure you're searching under all possible debtor names including any DBAs or trade names. I've seen UCC filings under names that weren't obvious from the main corporate records.
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Summer Green
•DBA searches are crucial. Sometimes the UCC-1 gets filed under the trade name instead of the legal entity name.
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Kara Yoshida
•This is why I always request a complete list of all business names from the borrower upfront. Saves time later.
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Philip Cowan
The bottom line is you can't rely on just one search. Use multiple services, check the state databases directly when possible, and verify the status of any filings you find. It's extra work but it protects your lender's security interest.
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Dana Doyle
•Definitely look into some of the automated tools to help streamline the verification process. Makes the multi-source approach much more manageable.
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Caesar Grant
•Smart approach. Better to over-search than under-search when it comes to UCC and lien verification.
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