UCC-1 showing up after discharge debt - am I still liable?

Yeah this happens more than it should. When you discharge debt through settlement, the lender is supposed to file a UCC-3 termination to clear the UCC-1 filing. Sounds like they just forgot or their internal process broke down. You need to contact them immediately and demand they file the termination. Get it in writing that they'll handle it within 30 days.

OMG this is my worst nightmare. I'm going through a settlement right now and I'm terrified they'll mess something like this up. Did you specifically ask them about the UCC filing when you were negotiating the discharge debt agreement?

I had almost this exact same issue last year after my equipment loan settlement. The bank kept giving me the runaround about filing the UCC-3 termination. What finally worked for me was using Certana.ai's document verification tool - I uploaded my settlement agreement and the original UCC-1 filing, and it generated a detailed report showing all the inconsistencies. When I sent that report to the bank's legal department, they filed the termination within a week. Sometimes you need that kind of documentation to get them to take action.

Check your settlement agreement carefully. If it says the debt is discharged but doesn't specifically mention releasing the security interest, you might have a problem. The UCC-1 filing creates a separate legal interest that doesn't automatically disappear when the debt is settled.

This is exactly why I hate dealing with banks. They're so sloppy with their paperwork after you discharge debt. I had to threaten legal action to get mine to file a UCC-3 termination. They act like it's doing you a favor instead of fixing their mistake.

You mentioned the equipment was part of the collateral - was it specifically described in the UCC-1 filing? If the settlement included transfer of that equipment or if you still own it, that could complicate things.

Had a client with this exact situation last month. Bank claimed they didn't need to file a UCC-3 termination because the debt was 'satisfied through settlement' not 'paid in full.' Complete BS. Settlement that discharges debt still requires termination of security interests.

I'm dealing with something similar but my lender went out of business. How do you get a UCC-3 termination filed when the original secured party doesn't exist anymore?

For future reference, always make UCC termination an explicit requirement in any debt settlement negotiation. Don't assume they'll handle it automatically when you discharge debt.

Update us when you get this resolved! I'm curious how long it takes them to fix their mistake once you contact them about the missing termination.

This is frustrating but unfortunately pretty common. Banks often have separate departments handling settlements vs UCC filings and they don't always communicate. The good news is you have clear grounds to demand they fix this - your settlement agreement should have language about releasing all security interests. I'd suggest calling them Monday with your settlement paperwork in hand and asking to speak with someone who can handle UCC-3 terminations immediately. Don't let them transfer you around - stay on the line until you get someone who can commit to filing the termination within 30 days max. Also, get their name and direct contact info so you can follow up. The fact that you're trying to get new financing makes this urgent since that UCC-1 is blocking your ability to use that equipment as collateral elsewhere.