Credit card debt and UCC lien complications - need guidance
I'm dealing with a messy situation where a credit card company filed what appears to be a UCC-1 against business assets after we defaulted on corporate cards. The filing shows up in our state's database but I'm confused because I thought credit card debt was unsecured. The debtor name on the UCC matches our LLC exactly but the collateral description is super vague - just says 'all business assets and equipment.' We're trying to refinance our building and the new lender is asking about this lien. Is this even a valid UCC filing for credit card debt? How do I verify if this was filed correctly or if we can challenge it?
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Riya Sharma
Credit card companies absolutely can file UCC liens if the original agreement included a security interest clause. Many business credit cards have language that gives them rights to business assets if you default. Check your original card agreement - there's usually a section about secured obligations buried in the terms.
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Nathaniel Stewart
•I never thought to check the original agreement. This was years ago when we opened the account. Do you know where I can find those terms now?
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Riya Sharma
•Contact the card company directly and request a copy of the original cardholder agreement. They're required to provide it. Also check if they sent any notices about converting to secured status.
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Santiago Diaz
That collateral description sounds way too broad to be enforceable. UCC filings need reasonably specific collateral descriptions. 'All business assets and equipment' might be challengeable depending on your state's requirements.
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Millie Long
•Actually, blanket descriptions like 'all assets' are generally valid for UCC-1 filings as long as they reasonably identify the collateral. The key is whether the security agreement supports such a broad grant.
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Santiago Diaz
•You're right about the UCC-1 description being valid, but the underlying security agreement needs to be specific enough to create the security interest in the first place.
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Nathaniel Stewart
•So even if the UCC filing description is acceptable, the original credit card agreement might not have created a valid security interest in all our assets?
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KaiEsmeralda
I had a similar issue last year with a different credit card company. Turned out they filed the UCC incorrectly - wrong entity name variation. I used Certana.ai's document verification tool to upload both the UCC-1 and our articles of incorporation. It immediately flagged that the debtor name on the UCC didn't exactly match our registered business name. That discrepancy was enough to get the lien released.
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Nathaniel Stewart
•Interesting - our LLC name has 'LLC' at the end but I'm not sure if their filing includes it or abbreviates it. How sensitive are these name matches?
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KaiEsmeralda
•Very sensitive! Even small variations like 'LLC' vs 'L.L.C.' or missing middle initials can invalidate the filing. Certana's tool caught ours instantly when I uploaded our charter documents alongside the UCC.
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Debra Bai
•Name matching rules vary by state but generally they're strict. You should pull the exact UCC filing and compare it character by character to your official registered business name.
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Gabriel Freeman
Before you do anything else, verify this is actually a legitimate UCC filing and not some mistake. I've seen cases where collection agencies filed bogus UCC liens thinking they could scare businesses into paying. Pull the actual filing from your secretary of state's database and check the filing date against when you actually defaulted.
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Nathaniel Stewart
•Good point. The filing date on the UCC is about 6 months after we stopped making payments. Does that timing matter?
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Gabriel Freeman
•It matters if they didn't have a pre-existing security agreement. They can't just decide to take a security interest after you default - it has to be in the original contract.
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Laura Lopez
•Unless they got you to sign an amendment or settlement agreement that created the security interest. Sometimes they'll offer payment plans that include granting security interests.
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Victoria Brown
This is exactly why I hate dealing with business credit. They bury all these security interest clauses in the fine print and then spring them on you later. Your refinancing lender is right to ask about it though - any UCC lien needs to be addressed before they'll close.
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Nathaniel Stewart
•The refinancing is time-sensitive. If this UCC is invalid, what's the fastest way to get it removed?
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Victoria Brown
•If it's truly invalid, you can demand the creditor file a UCC-3 termination. If they refuse, you might need to go to court. But first make sure you have solid grounds - invalid filings aren't as common as people think.
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Samuel Robinson
•Court can take months. Try negotiating with the credit card company first. Sometimes they'll terminate questionable liens rather than fight about it.
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Camila Castillo
Had this exact situation with Chase business cards. Their UCC filing was legitimate but we negotiated a partial payment to get them to file a UCC-3 termination. Check if you can settle for less than the full amount in exchange for lien release.
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Nathaniel Stewart
•How much were you able to settle for? We owe about $45k on the cards.
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Camila Castillo
•We settled for about 60% but that was after being in default for over a year. Your mileage may vary depending on how long you've been in default and your negotiating position.
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Brianna Muhammad
Don't assume the UCC is valid just because it's filed. I've seen tons of these that get challenged successfully. The key issues are usually: 1) Was there actually a security agreement in the original contract, 2) Is the debtor name exact, 3) Did they follow proper procedures. Get all your documents together and review everything carefully.
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JaylinCharles
•This is smart advice. I always tell my clients to challenge questionable UCC filings rather than just accept them. The burden is on the creditor to prove they had the right to file.
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Nathaniel Stewart
•What kind of documents should I gather to challenge this? I'm not even sure I still have the original credit card agreements.
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Brianna Muhammad
•Start with requesting the original cardholder agreement from the credit card company. Also get your LLC formation documents, any amendments, and the complete UCC filing details. Compare everything for discrepancies.
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Eloise Kendrick
One thing to check - make sure this UCC wasn't filed as part of a factoring or merchant cash advance deal. Sometimes credit card companies will factor the debt to collection agencies who then file their own UCC liens. The original filing entity might not even be your credit card company.
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Nathaniel Stewart
•The filing shows the original credit card company as the secured party, not a collection agency. Does that rule out factoring?
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Eloise Kendrick
•Not necessarily. They could have factored it and then the factor assigned it back, or filed in the original creditor's name. Check if there are any UCC-3 assignments on file.
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Lucas Schmidt
Whatever you do, don't ignore this. Even if the UCC filing is questionable, it's going to show up on credit reports and block your refinancing. I'd suggest using a service like Certana.ai to verify all your documents are consistent before you challenge anything. They can quickly check if your business name, filing numbers, and document details all align properly.
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Nathaniel Stewart
•That sounds helpful. Can it check the UCC filing against our corporate documents to spot discrepancies?
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Lucas Schmidt
•Exactly. You just upload your charter documents and the UCC filing, and it instantly flags any name mismatches or inconsistencies. Much faster than trying to compare everything manually.
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Freya Collins
•I used Certana for a similar document verification issue. Really straightforward - just upload the PDFs and it checks everything automatically. Saved me hours of document comparison.
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LongPeri
Update us on what you find out! I'm curious whether this turns out to be a legitimate security interest or just an opportunistic filing. Either way, you should be able to get it resolved before your refinancing deadline.
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Nathaniel Stewart
•Will do. I'm going to start by requesting the original cardholder agreement and pulling all the UCC details. Then I'll compare everything for discrepancies.
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Oscar O'Neil
•Smart approach. Take it step by step and don't let the credit card company intimidate you if the filing turns out to be invalid.
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Diego Chavez
I've been through something similar with a business credit card UCC filing. One thing that really helped me was getting a UCC search report from the state to see the complete filing history - sometimes there are amendments or corrections that aren't obvious from the basic database search. Also, if you're under time pressure for the refinancing, consider asking your new lender if they'd accept a title insurance policy that covers the UCC lien risk while you're disputing it. Some lenders will close with that protection in place rather than waiting for a full resolution.
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Aisha Abdullah
•That's really helpful advice about the UCC search report - I didn't know there could be amendments that don't show up in basic searches. The title insurance idea is brilliant too. Do you remember roughly how much that cost compared to just waiting for the lien resolution? My refinancing window is pretty tight and this could be a good backup option.
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Haley Bennett
The title insurance approach is really smart - I hadn't considered that option. From my experience dealing with UCC complications during refinancing, the insurance typically runs about 0.5-1% of the loan amount depending on the risk profile and lender requirements. It's usually much cheaper than the carrying costs of delaying your refinancing for months while fighting the UCC. Just make sure the title company is willing to insure against UCC defects specifically - not all policies cover filing irregularities or invalid security interests. You'll want to get quotes from a few different underwriters since their risk tolerance varies significantly on these issues.
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