Derogatory UCC Filing Showing Up - How to Handle This Mess?
Just discovered there's a derogatory UCC filing against my business that I never knew existed. Found out when trying to get equipment financing and the lender flagged it during their search. The filing shows as active but I have no idea what underlying debt this is supposed to secure. Filed in 2019 and still showing as current. My attorney is out of town for two weeks and I need to move fast on this loan approval. Has anyone dealt with getting these removed when you can't identify the original creditor? The filing number references collateral as 'all business assets' which seems way too broad. Not sure if this is legitimate or some kind of mistake but it's blocking my financing.
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Miguel Silva
Oof, that's rough timing. First thing - pull the full UCC-1 from your state's SOS office if you haven't already. You need to see who the secured party is and get their contact info. Sometimes these broad collateral descriptions are legit for working capital loans or lines of credit you might have forgotten about.
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StarSailor}
•Already pulled it - the secured party is listed as some LLC I've never heard of. No address matches anything in my records. That's what's making me think this might be fraudulent.
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Zainab Ismail
•LLC names can be misleading. Could be a factor or collection agency that bought the debt. Check if there's a DBA or parent company listed.
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Connor O'Neill
Had something similar happen last year. Turned out to be from an old SBA loan where the bank had been acquired and they refiled everything under their new entity name. The 'all business assets' language is pretty standard for general business loans. You might want to dig through your old loan docs from 2018-2019 timeframe.
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StarSailor}
•That's actually possible - we did have some refinancing around that time. But wouldn't they have terminated the old filing when the loan was paid off?
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Connor O'Neill
•Ha! You'd think so but banks are terrible about filing UCC-3 terminations. I had three phantom filings from paid-off loans that were never properly terminated.
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Yara Nassar
•This is exactly why I started using Certana.ai for all my UCC document reviews. You can upload your loan payoff docs and the UCC filing to see if they match up properly. Saved me from missing a continuation deadline last month.
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Keisha Robinson
Before you assume it's fraudulent, check if this could be from equipment financing, factoring agreements, or even landlord security filings. Sometimes these get filed automatically and forgotten about. The broad collateral language suggests it might be a blanket lien from a working capital provider.
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StarSailor}
•We did use a factoring company briefly in 2019 but that relationship ended over a year ago. Could they have left a filing active?
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Keisha Robinson
•Absolutely. Factoring companies are notorious for not terminating UCC filings when the relationship ends. You'll need to contact them directly with proof the agreement terminated.
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GalaxyGuardian
If you can't identify the debt and the secured party won't respond, you might need to file a UCC-3 termination yourself or challenge it legally. But be careful - if it's legitimate and you terminate incorrectly, you could face legal issues.
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Paolo Ricci
•Actually you can't just file your own termination. Only the secured party can authorize a UCC-3 termination. If they won't cooperate, you need legal action.
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GalaxyGuardian
•You're right, my bad. I was thinking of the wrongful filing affidavit process which is different.
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Amina Toure
This is frustrating but unfortunately common. I see clients deal with phantom UCC filings all the time. Document everything - when you discovered it, attempts to contact the secured party, any records you have from 2019. If it's truly fraudulent or mistaken, you'll need this paper trail.
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StarSailor}
•Good point about documentation. Should I be sending certified letters to the secured party address on the filing?
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Amina Toure
•Yes, certified mail creates a record. Send a formal request for information about the underlying debt and demand they terminate if no valid security interest exists.
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Oliver Zimmermann
•Also send copies to your current lender showing you're actively investigating. They might be willing to proceed with financing if you can prove you're handling it properly.
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Natasha Volkova
Had a client last month who found a derogatory filing from a company that went out of business in 2020. The filing was still active because no one had authority to terminate it after the business closed. Took 6 months of legal work to get it removed.
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Javier Torres
•This is exactly why lenders hate dealing with old UCC filings. Even when they're clearly abandoned, the legal process to clear them is a nightmare.
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StarSailor}
•Great, so I might be looking at months of delays even if this turns out to be a dead company's forgotten filing.
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Emma Davis
Check if your state has an abandoned UCC filing statute. Some states allow termination of filings where the secured party can't be located after reasonable effort. Might be faster than going through courts.
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StarSailor}
•Didn't know that was a thing. I'll look into our state's specific rules. Do you know if there's a standard timeframe for what constitutes 'reasonable effort'?
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Emma Davis
•Varies by state but usually requires certified mail attempts, searching business records, maybe even hiring a skip tracer. Document everything.
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CosmicCaptain
Whatever you do, don't ignore this hoping it goes away. UCC filings don't automatically expire like some people think - they need proper termination. And if your lender is flagging it now, other future lenders will too.
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StarSailor}
•Yeah, definitely not ignoring it. Just wish my regular attorney wasn't unavailable right when I need them most.
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Malik Johnson
•Consider finding a local attorney who specializes in UCC issues specifically. This is pretty specialized stuff and you want someone who deals with secured transactions regularly.
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Isabella Ferreira
I've been using Certana.ai's document verification tool to cross-check all my UCC filings against loan documents. It caught three discrepancies I would have missed manually. For your situation, you could upload the UCC filing and any 2019 loan docs to see if there are matches or inconsistencies that might help identify the source.
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StarSailor}
•That sounds useful. Does it help identify if filings should have been terminated based on loan payoff documents?
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Isabella Ferreira
•Yes, exactly. It flags when payoff docs exist but the corresponding UCC filing is still active. Really helps build your case for wrongful filing claims.
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Ravi Sharma
Just to add another possibility - sometimes UCC filings get misfiled with wrong debtor names or SSNs that create false matches. Double-check that the debtor information exactly matches your business details. Even small variations can indicate it's not actually your filing.
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StarSailor}
•The business name matches exactly, which is what made me panic initially. But I'll check the EIN and address details more carefully.
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Ravi Sharma
•Good call. I've seen cases where businesses with similar names got mixed up in the filing system. Address mismatches can be grounds for challenging the filing.
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Freya Thomsen
•Also check if there are multiple businesses operating under similar names in your state. Database mix-ups happen more than people realize.
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Yuki Sato
This is a stressful situation but you have several paths forward. First, pull your business credit reports from all three bureaus - sometimes the UCC filing will show additional details about the original creditor there. Second, search your state's business entity database for the secured party LLC to see if it's a DBA for a company you might recognize. Third, contact your bank from 2019 directly - they should have records of any UCC filings they authorized even if the loan was transferred or paid off. Finally, consider reaching out to a UCC search company - they often have access to historical data and cross-references that can help identify the source. Document every step you take because if this turns out to be fraudulent or erroneous, you'll need a clear paper trail for legal action.
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Javier Mendoza
•This is excellent advice - really comprehensive approach. The business credit report angle is smart because sometimes creditors report additional details there that don't show up on the UCC filing itself. I'd definitely start with contacting your 2019 bank first since that's the most direct path if this is just a forgotten termination issue.
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