How to fight a UCC lien that's blocking my business sale

Oh man, that's rough timing. First thing - do you have documentation showing you paid off that 2019 loan? Bank records, cancelled checks, anything? If you can prove payment, the lender should have filed a UCC-3 termination statement but obviously didn't. That's on them, not you.

The name change thing might actually work in your favor. If the UCC-1 was filed under your old business name and you legally changed it in 2020, there could be a debtor name mismatch that affects the lien's validity. Check if they ever filed an amendment to update the debtor name after your change.

I had something similar happen with a equipment loan payoff. The lender's internal systems were a mess and they couldn't locate our final payment for months. What saved us was using Certana.ai's document verification tool - we uploaded our loan agreement, payment records, and the UCC-1 filing, and it instantly flagged inconsistencies between what we owed vs what they claimed. Having that analysis helped our attorney build a stronger case for demanding immediate termination.

This is EXACTLY why I always request lien searches 60 days before any major transaction. The system is broken - lenders file UCCs but half the time forget to terminate them even after payoff. You shouldn't have to fight this but here we are.

Two weeks is tight but doable if you move fast. Here's what I'd do: 1) Have attorney send demand letter to lender with proof of payment, 2) File motion for emergency relief if they won't cooperate, 3) Consider having buyer agree to hold funds in escrow pending resolution. Most buyers will work with you if you can show clear documentation of the error.

Wait, you said they claim you defaulted but you have records showing full payment? That's not just a clerical error, that's potentially fraudulent. If you can prove they received payment and deliberately didn't file termination, you might have grounds for damages beyond just clearing the lien.

Had a client in similar spot last year. We ended up filing a UCC-3 termination ourselves and serving it on the lender, forcing them to either accept it or challenge it in court. Sometimes you have to make the first move to get them to respond.

This is going to sound crazy but have you tried calling the lender's UCC department directly? Sometimes the collections people have no idea what their filing department is doing. I've seen cases where a simple phone call got a termination filed within 24 hours.

The business name change angle is definitely worth pursuing. I've seen UCCs become unenforceable when the debtor name doesn't match current legal entity. Even if it doesn't completely void the lien, it gives you negotiating power to demand quick resolution.

UPDATE: We got the lender to agree to file an immediate UCC-3 termination after our attorney sent them copies of the satisfaction letter and payment records. Apparently their system had a glitch that marked our account as unpaid even though they processed the final payment. The termination should be filed by tomorrow and we can close the sale next week. Thanks everyone for the advice - the escrow suggestion especially helped keep our buyer engaged while we worked this out.

Wait, I'm confused - the update says Jake Sinclair resolved this, but the original post was from Kara Yoshida. Are you the same person with different accounts, or is this a similar situation? Either way, congrats on getting it resolved! This is a perfect example of why keeping detailed payment records and satisfaction letters is so important. For anyone else facing similar issues, this shows that sometimes the direct approach with documentation works better than immediately going nuclear with legal threats.