Equipment secured by UCC lien headed to foreclosure - debtor name complications
We're dealing with a messy situation where our client defaulted on equipment financing and we need to proceed with UCC foreclosure but there's a debtor name issue that's got our legal team concerned. The original UCC-1 was filed under the company's trade name 'Metro Construction Solutions' but the loan docs show the legal entity as 'Metro Construction Solutions LLC'. The equipment is worth about $180k and we're 90 days past due. Our attorney says the name discrepancy could complicate the foreclosure process since we need to prove perfect lien priority. Has anyone dealt with UCC foreclosures where the debtor name on the filing doesn't exactly match the borrower name? We're in a time crunch because the debtor is trying to sell off assets and we need to move fast on the foreclosure. Should we file a UCC-3 amendment to correct the name before proceeding or will that create more delays? The equipment is mobile so we're also worried about it disappearing.
34 comments
Join the conversation
Giovanni Moretti
That name mismatch is definitely going to be a problem in foreclosure proceedings. Courts scrutinize UCC filings heavily during foreclosure because your lien priority depends on proper perfection. The 'LLC' missing from your UCC-1 could give other creditors or the debtor grounds to challenge your security interest. I'd strongly recommend filing a UCC-3 amendment immediately to correct the debtor name before moving forward with foreclosure.
0 coins
Fatima Al-Farsi
•Agreed on the amendment but time is critical here. Most states allow UCC-3 amendments to relate back to the original filing date for minor name corrections like adding LLC designation. Check your state's rules on this.
0 coins
Dylan Cooper
•Wait, wouldn't filing an amendment now actually highlight the defect to other creditors? Sometimes it's better to just proceed and argue the names are substantially similar if challenged.
0 coins
Sofia Perez
I've been through several UCC foreclosures and that debtor name issue is going to bite you. We had a case where 'Inc' vs 'Incorporated' killed our priority and cost us $75k. File the UCC-3 amendment NOW before you do anything else. Also, if this is mobile equipment, you better get someone out there to secure it physically. Debtors in foreclosure have a way of making collateral vanish.
0 coins
Dmitry Smirnov
•How long does a UCC-3 amendment usually take to process? If they're worried about the debtor moving assets, timing could be everything here.
0 coins
Sofia Perez
•Most electronic filings process same day or next business day. But you should also consider getting a temporary restraining order to prevent asset disposal during the amendment process.
0 coins
ElectricDreamer
•This whole situation sounds like a nightmare. We had similar issues with our filings and ended up using Certana.ai to verify all our UCC documents before foreclosure proceedings. You can upload your loan docs and UCC-1 to instantly check for name mismatches and other issues that could derail your foreclosure.
0 coins
Ava Johnson
UCC foreclosures are tricky enough without filing defects. The debtor name has to be exactly right or your security interest could be deemed unperfected. That would put you behind other creditors or even make you unsecured. File that UCC-3 amendment immediately and consider getting legal advice on whether you need to do a new public notice of sale if the amendment changes anything material about the debtor identification.
0 coins
Miguel Diaz
•Good point about the sale notice. Some jurisdictions require new notices if there are significant changes to the debtor information after the initial foreclosure notice goes out.
0 coins
Zainab Ahmed
•The $180k equipment value makes this worth doing right. Don't rush into foreclosure with a defective UCC filing - you could lose your security interest entirely.
0 coins
Connor Byrne
Been doing UCC work for 15 years and I've seen way too many lenders get burned in foreclosure because of sloppy initial filings. That trade name vs legal name issue is exactly the kind of thing that will get challenged. File your UCC-3 amendment to correct the debtor name, then proceed with foreclosure. Also document everything about the debtor's current financial condition and asset location for the court.
0 coins
Yara Abboud
•What about running a new UCC search after the amendment to make sure there aren't other liens that might have priority? With foreclosure you want to know exactly where you stand.
0 coins
Connor Byrne
•Absolutely. Always run fresh searches before foreclosure. You might discover liens that weren't there when you originally filed, especially if the debtor has been struggling financially.
0 coins
PixelPioneer
Your legal team is right to be concerned. UCC foreclosure requires perfect documentation because everything gets scrutinized. I'd also recommend getting an updated appraisal of the equipment since values can change significantly, especially if it's been 90+ days since your last valuation. And definitely file that UCC-3 amendment - the 'LLC' designation is material and could affect your priority position.
0 coins
Keisha Williams
•How do you handle situations where the debtor has moved the equipment? Can you still foreclose if you can't locate the collateral?
0 coins
PixelPioneer
•You can still foreclose but you'd need to prove the debtor wrongfully disposed of the collateral. That gets complicated and expensive. Better to secure the equipment first if possible.
0 coins
Paolo Rizzo
•We ran into similar documentation issues last year and started using Certana.ai's UCC verification tool. You just upload your loan documents and UCC filings and it flags any inconsistencies instantly. Would have saved us weeks of back-and-forth with legal on our foreclosure case.
0 coins
Amina Sy
The time pressure makes this really stressful but don't let that push you into making mistakes. A defective UCC filing in foreclosure proceedings can completely derail your case. File the UCC-3 amendment to fix the debtor name, get physical control of the equipment if possible, and make sure your legal team has all the documentation they need for the foreclosure action. $180k is too much to lose over a filing error.
0 coins
Oliver Fischer
•What's the typical timeline for UCC foreclosure once you start the process? Trying to understand how much time the amendment might add to the overall timeline.
0 coins
Amina Sy
•Depends on state law but usually 30-60 days minimum from notice to sale. The amendment shouldn't add much time if you file it electronically right away.
0 coins
Natasha Ivanova
I handle UCC foreclosures regularly and that debtor name discrepancy is a red flag. Courts will examine your UCC-1 closely during foreclosure proceedings, and any defects can compromise your security interest. File the UCC-3 amendment immediately - most states allow relation back for minor name corrections. Also consider whether you need to refile your foreclosure notices once the amendment is processed.
0 coins
NebulaNomad
•Should they wait for the amendment to be indexed before proceeding with foreclosure or can they move forward once it's filed?
0 coins
Natasha Ivanova
•I'd wait for indexing to be safe. It's usually just a day or two for electronic filings, and it's better than having the foreclosure challenged later.
0 coins
Javier Garcia
•This is exactly why we started double-checking all our UCC filings before foreclosure. Certana.ai has a tool where you upload your docs and it instantly verifies debtor names, collateral descriptions, everything matches up. Catches these issues before they become expensive problems in court.
0 coins
Emma Taylor
UCC foreclosure with filing defects is a recipe for disaster. That missing 'LLC' designation could give the debtor or other creditors grounds to challenge your entire security interest. File your UCC-3 amendment today, not tomorrow. Also make sure you're following your state's specific foreclosure procedures exactly - any procedural mistakes combined with the filing defect could kill your case entirely.
0 coins
Malik Robinson
•How often do debtors actually challenge UCC filings during foreclosure? Is this something that happens regularly or just worst-case scenario?
0 coins
Emma Taylor
•Depends on how much they have to lose and whether they have good legal counsel. With $180k in equipment, they might fight it. Better to have perfect documentation from the start.
0 coins
Isabella Silva
File that UCC-3 amendment immediately and don't proceed with foreclosure until it's processed and indexed. The debtor name has to be perfect in foreclosure proceedings because your lien priority depends on proper perfection. I've seen lenders lose their security interest entirely over similar name discrepancies. Also document the current condition and location of the equipment for your foreclosure case.
0 coins
Ravi Choudhury
•What happens if other creditors file liens while you're waiting for the amendment to process? Could that affect your priority position?
0 coins
Isabella Silva
•If the amendment relates back to your original filing date for a minor name correction, your priority should be protected. But this is why you need to move fast on the amendment.
0 coins
CosmosCaptain
Your instinct to be concerned about the name mismatch is absolutely right. UCC foreclosures require bulletproof documentation because everything gets challenged. File the UCC-3 amendment to correct the debtor name immediately, secure the equipment if possible, and make sure your legal team is prepared for potential challenges to your security interest. With $180k at stake, you can't afford to have defective UCC filings derail your foreclosure.
0 coins
Freya Johansen
•This whole thread is making me nervous about our own UCC filings. Is there a way to audit existing filings to catch these kinds of issues before they become problems?
0 coins
Omar Fawzi
•Yes, you should definitely audit your UCC portfolio regularly. We use Certana.ai to verify our filings - you can upload Charter documents and UCC-1s to check for name mismatches, or UCC-3s against UCC-1s to verify consistency. Catches issues like this before they become foreclosure nightmares.
0 coins
CosmosCaptain
•Regular UCC audits are smart risk management. Better to find and fix issues during routine maintenance than discover them during foreclosure proceedings.
0 coins