Does a UCC lien survive foreclosure - confused about lien priority after real estate sale

We filed a regular UCC-1, not a fixture filing. The equipment is manufacturing equipment that's bolted to concrete pads but it's definitely removable and was always treated as personal property in our loan docs. So you're saying the foreclosure shouldn't have affected our UCC lien?

Correct - if it's truly personal property and not fixtures, your UCC lien should still be valid. The foreclosure sale only transfers the real estate and any fixtures, not personal property subject to valid security interests. You should still have the right to repossess the equipment, but the bankruptcy complicates things significantly.

Be careful here though - just because you filed a regular UCC-1 doesn't automatically mean the equipment isn't fixtures. Courts look at the actual attachment to determine fixture status, not just how you filed. If that equipment is seriously integrated into the building's operations, you might have a problem.

Ugh, I was afraid of that. So even though we have a valid security interest, we can't actually do anything about it right now because of the bankruptcy stay? How long does that typically take to resolve?

In Chapter 7, if the trustee decides the equipment has no value to the estate, they'll usually abandon it within 60-90 days. If they think it has value, you'll need to file a motion for relief from stay which can take 2-4 months depending on the court's schedule. Either way, you're looking at several months minimum.

Never heard of that service but sounds useful. Did it actually help with the bankruptcy court or just give you peace of mind?

Both actually. The trustee questioned whether our security interest was properly perfected, and having the verification report showing all our documents were consistent definitely helped. Plus it flagged that we needed to update our debtor's legal name which we did with a UCC-3 amendment before filing our motion.

Smart move on checking the docs. I've seen too many cases where lenders thought they were secured but had minor name mismatches or filing errors that came back to bite them in bankruptcy proceedings.

The debtor still owns the equipment (or rather, the bankruptcy estate does now). The foreclosure sale only transferred the real estate. The equipment remains personal property of the debtor/estate, subject to the secured lender's UCC lien.

So the new property owner basically has someone else's equipment sitting on their property? That seems like it would create problems for everyone involved.

Exactly why these situations get messy fast. The new property owner can't use or move the equipment, the bankruptcy trustee may or may not want it, and the secured lender can't repossess it without court approval. Everyone's stuck until the bankruptcy sorts it out.

Hindsight is 20/20 I guess. Our attorney at the time said regular UCC-1 was fine since we were treating it as personal property. Now I'm second-guessing everything about how we structured this loan.

Don't beat yourself up too much. Fixture vs personal property is one of the trickiest areas in secured transactions. Even experienced attorneys disagree on borderline cases. The key is just making sure your documentation is bulletproof for whatever approach you take.

Not yet, we're still trying to figure out our legal position before reaching out. The equipment is probably worth around $120k used, so there might be some equity there after our $140k loan.

Wait, if your loan balance is $140k and the equipment is only worth $120k, there's no equity for the estate. The trustee will almost certainly abandon it. You should be in good shape once the bankruptcy plays out.

Assuming the UCC lien is actually valid and enforceable. That's still the big question mark here depending on whether a court decides this stuff is fixtures or not.

Good point. We did the continuation ourselves using the SOS portal but didn't really verify it got processed correctly. Should probably double-check that.

Definitely check that continuation. I've seen cases where the continuation looked like it went through but had errors that weren't caught until later. Also worth running another Certana.ai check if you haven't already - their system catches continuation filing issues that might not be obvious.

How do courts usually decide the fixture vs personal property question? Is it just about how attached the equipment is?

Courts look at three main factors: degree of attachment, adaptation to the property's use, and intent of the parties. Just being bolted down isn't enough to make something a fixture if it's clearly intended as removable equipment.

Our loan documents specifically call it personal property and equipment, never real estate or fixtures. Hopefully that shows intent clearly enough.

True, but if they have valid lien rights, the new owner can't legally prevent repossession. They'd have to allow reasonable access for removal.

Legally yes, but practically it can still be a nightmare. I've seen cases where equipment removal required court orders just to get access to the property.

Thanks, that's helpful. Sounds like we need to file something with the bankruptcy court either way. Appreciate everyone's input on this - definitely more complicated than I initially thought.

Before you file anything, make sure you run a complete document verification check. The bankruptcy trustee will scrutinize every detail of your lien perfection, and any inconsistencies could be problematic. Better to catch issues now than in court.

This is really helpful to hear from someone who's been through it! The 45-day abandonment timeline gives me some hope. Quick question - when you say "professionally reviewed," did you use a law firm or some kind of document verification service? And did the trustee give you any advance notice they were going to abandon the equipment, or did it just happen suddenly?

@b6ca316eeb5f That's really encouraging to hear! I'm actually the original poster (Liam) - just using a different device. Your timeline sounds much better than what I was expecting. When you mention professional document review, did you find any specific issues that needed to be corrected before dealing with the trustee? I'm starting to think we should definitely get our UCC-1 and continuation filing double-checked before this goes any further. The photo documentation is a great suggestion too - I hadn't thought about that but it makes total sense for protecting ourselves.

@bef52cdd6657 @9977feaefd10 For the professional review, I ended up using both - started with Certana.ai for the initial document consistency check (caught a minor discrepancy in how we described the collateral), then had our attorney review everything before filing with the bankruptcy court. The trustee actually sent a formal notice about 10 days before abandoning the equipment, which gave us time to prepare for repossession. The biggest issue the document review caught was that our UCC-1 listed the debtor as "ABC Manufacturing LLC" but our loan agreement used "ABC Manufacturing, LLC" (with the comma). Small detail but could have been a problem. Also make sure your equipment serial numbers match exactly between all documents - trustees love to challenge perfection on technical details like that.

@6fcd76e066fc That comma detail is exactly the kind of thing that would keep me up at night! Really appreciate you sharing the specifics from your case. It sounds like the document verification tools can catch these technical issues that might otherwise slip through. The 10-day notice from the trustee also sounds reasonable - gives you time to line up repossession logistics without scrambling at the last minute. One more question if you don't mind - when you finally did repossess the equipment, did you run into any issues with the new property owner? I'm worried about potential access problems or disputes over removal costs/property damage during the process.

@24e3c8f42abc The property owner situation was actually smoother than I expected. We reached out to them proactively once we got the abandonment notice, explained our legal rights, and offered to coordinate removal at their convenience. They were actually relieved because they didn't want someone else's equipment sitting there indefinitely. We did have to provide our insurance certificate and agree to restore the concrete pads to original condition, but that was reasonable. The key was communicating early and professionally rather than just showing up with a truck one day. I'd recommend having that conversation with the new owner soon - even before the trustee makes their decision - just to establish a working relationship and avoid any surprises later. Most property owners understand secured creditor rights once you explain the situation calmly.

Welcome to the community @1f57cb1d9e47! Really appreciate your thoughtful summary of the situation. You're right that this is unfortunately a common scenario many of us have dealt with. The informal trustee communication idea is interesting - I hadn't considered that approach but it makes sense to get a feel for their thinking before filing formal paperwork. From what I've seen in other cases, most Chapter 7 trustees are pretty straightforward about equipment that's underwater on liens. They want to focus on assets that actually benefit unsecured creditors. @d2bef0c1d010 might want to have their attorney make a casual inquiry call to the trustee's office to discuss timeline and approach. Sometimes trustees will even tell you upfront if they're planning to abandon specific assets, which can save everyone time and legal fees. The document verification step really can't be emphasized enough though - better to catch any technical issues now rather than have them come up during trustee scrutiny.

Welcome to the community @961804294280! You raise a really interesting point about operational issues for the new property owner. In my limited experience, this can actually work both ways. If the equipment is integral to the building's systems (HVAC, manufacturing infrastructure, etc.), the new owner might be more motivated to work out some kind of arrangement - either facilitating quick removal or even potentially negotiating to keep it. On the flip side, if it's just taking up valuable space or creating liability concerns, they'll usually be happy to see it go. @d2bef0c1d010, this might be worth considering in your situation - understanding how critical your manufacturing equipment is to the property's functionality could inform your negotiation strategy with both the trustee and new owner. Sometimes what seems like a complication can actually be leveraged into a smoother resolution for everyone involved.

As someone new to this community, I'm really impressed by the depth of expertise and practical experience being shared here. @0f6009d1845b makes an excellent point about documenting the equipment's integration level - that could be crucial evidence for the personal property vs fixture determination. Reading through this entire discussion, it seems like @d2bef0c1d010 actually has several factors working in their favor: a properly filed UCC-1, equipment that sounds genuinely removable, loan documents that clearly treat it as personal property, and most importantly, no equity for the bankruptcy estate which should lead to quick abandonment. The systematic approach everyone's recommending - document verification first, informal trustee communication, proactive coordination with the property owner - creates a clear roadmap for resolution. What I find particularly valuable is how this thread demonstrates that while these UCC/foreclosure/bankruptcy intersections seem overwhelming at first, they follow predictable patterns that experienced practitioners can navigate successfully. The real-world examples and specific technical details (like the comma in the entity name) are incredibly helpful for understanding what actually matters in practice versus what might seem important in theory.

Welcome to the community @d7e26392c879! You've provided an excellent summary of the key takeaways from this discussion. As another newcomer, I'm also impressed by how this thread illustrates that what initially seems like an insurmountable legal tangle actually has a fairly clear path forward when you break it down systematically. The practical insights shared here - especially the real-world timelines and the importance of those seemingly minor technical details - are incredibly valuable for anyone dealing with secured lending complexities. @d2bef0c1d010, it's encouraging to see how much clarity has emerged from this discussion. The consensus seems strong that your UCC lien likely survived the foreclosure, the bankruptcy timeline may actually work in your favor, and there's a proven playbook for managing these situations successfully. The emphasis on document verification as the first step really resonates - it's much better to identify and address any technical issues proactively rather than discover them during trustee review. This thread is a great example of how community knowledge can transform a stressful, confusing situation into a manageable process with clear next steps.

@d7e26392c879 @5f2b102f3c0d Thank you both for the warm welcome! As someone just joining this community, I'm really struck by the collaborative approach here and how everyone's sharing practical, actionable insights rather than just theoretical knowledge. What's particularly impressive is how this thread has evolved from @d2bef0c1d010's initial confusion and concern into a clear roadmap with specific next steps. The real-world examples and technical details shared by experienced members like @b6ca316eeb5f and @6fcd76e066fc show exactly how these situations play out in practice, which is incredibly valuable for understanding not just the legal principles but the actual process mechanics. I'm also noting how many members have emphasized the document verification step - it seems like services like Certana.ai are becoming standard tools for ensuring UCC filings are bulletproof before facing bankruptcy court scrutiny. The consistency of advice around proactive communication with trustees and property owners suggests this is a well-established best practice that really works. This discussion is a perfect example of how complex legal scenarios become much more manageable when you have experienced practitioners sharing their knowledge and proven strategies.

Welcome to the community @0b90cf49d9d3! As another newcomer, I'm equally impressed by the depth of expertise and collaborative spirit here. Your summary really captures how this discussion has transformed what initially seemed like a crisis into a structured problem with clear solutions. What I find most encouraging for @d2bef0c1d010 is how multiple experienced members have independently reached similar conclusions about the likely outcome - that's a strong indicator the analysis is sound. The emphasis on document verification as the critical first step really resonates with me. From what I've learned following this thread, it seems like many secured lending disputes come down to technical perfection rather than broader legal principles. The fact that services like Certana.ai can catch these issues proactively before they become problems in bankruptcy court seems like a game-changer for lenders. I'm also struck by how the community has identified not just the legal pathway but the practical relationship management aspects - the advice about early communication with the property owner to establish cooperation rather than confrontation shows real wisdom from experience. This thread is becoming an excellent case study in how complex multi-jurisdictional secured lending issues can be resolved systematically.