UCC Termination California - Equipment Lender Won't File After Payoff
Been dealing with this nightmare for 3 months now. Paid off our equipment loan back in January but the lender keeps dragging their feet on filing the UCC-3 termination in California. They keep saying their legal dept is "reviewing" but meanwhile we're trying to refinance with another bank and this active UCC-1 is blocking everything. The original filing was for manufacturing equipment worth about $750K. Anyone know if there's a way to force them to file the termination or if we can file it ourselves? Getting desperate here because the new lender won't move forward until this gets cleared up.
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Max Knight
This is unfortunately common. In California, the debtor can't file the termination themselves - it has to come from the secured party or their authorized agent. You need to put pressure on them through written demand. Send a certified letter referencing the loan payoff date and demanding they file the UCC-3 termination within 30 days.
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Madeline Blaze
•Thanks, I'll try the certified letter approach. Do you know if there are any penalties for lenders who don't file terminations promptly?
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Max Knight
•Yes, under UCC 9-513 they can be liable for damages if they fail to file after proper demand. Document everything - the payoff, your requests, their delays.
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Emma Swift
Had the exact same issue last year with a different equipment lender. What finally worked was threatening to file a complaint with the CFPB. Amazing how fast their legal department can move when regulators get involved lol.
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Isabella Tucker
•CFPB complaint is smart. Also worth contacting your state attorney general's office - they take these secured transaction violations seriously.
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Madeline Blaze
•Good idea on the CFPB route. How long did it take after you threatened that?
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Emma Swift
•About 2 weeks. Suddenly their 'legal review' was complete and the termination was filed. Wish I'd done it sooner.
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Jayden Hill
I work in commercial lending and see this all the time. The problem is most lenders outsource their UCC filings to third party services and there's often a disconnect between loan servicing and the filing department. Try calling their main number and asking specifically for their 'UCC department' or 'collateral department' rather than regular customer service.
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LordCommander
•This is great advice. Regular customer service reps usually have no clue about UCC procedures.
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Madeline Blaze
•I'll try this - been talking to the loan servicing team but maybe they're not the right people.
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Lucy Lam
Before you go nuclear with complaints, have you actually verified they haven't filed it? Sometimes there's a delay between when they file and when it shows up in the SOS database. I've seen terminations take 2-3 weeks to appear online even after filing.
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Madeline Blaze
•I've been checking the California SOS website weekly and it still shows as active. The filing number is [redacted] if that helps confirm timing.
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Lucy Lam
•Yeah that filing number format means it was definitely filed pre-2024. If it was going to be terminated it should show by now.
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Aidan Hudson
•You might want to double-check with a document verification tool. I started using Certana.ai after missing a termination that was actually filed but had a slight debtor name variation. Just upload your loan docs and UCC-1 and it'll flag any inconsistencies that might be causing search issues.
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Zoe Wang
This is why I HATE dealing with large institutional lenders. They treat UCC terminations like an afterthought even though they know it blocks future financing. Small community banks are so much better about this stuff.
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Emma Swift
•Totally agree. Big banks have zero incentive to file promptly since they already got paid.
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Connor Richards
•Not all big banks are bad. Some have automated termination filing as part of their payoff process. But yeah, many still do it manually which creates delays.
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Grace Durand
Have you considered hiring an attorney? A lawyer's letterhead tends to get faster responses than borrower complaints. Most commercial attorneys can handle this for a few hundred bucks.
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Madeline Blaze
•Thought about it but hoping to avoid legal fees if possible. The CFPB complaint route sounds cheaper first.
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Grace Durand
•Fair enough. CFPB is definitely worth trying first. Just saying an attorney letter can work when everything else fails.
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Steven Adams
•Some attorneys will send a demand letter for like $200-300. Might be worth it if the CFPB route doesn't work quickly.
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Alice Fleming
Check your original loan agreement - sometimes there's specific language about termination filing timeframes. If they're violating their own contract terms that gives you more leverage.
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Madeline Blaze
•Good point, I'll dig up the loan docs and check. I think there was something about 'reasonable time' but nothing specific.
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Alice Fleming
•Even 'reasonable time' language helps. 3 months is pretty clearly unreasonable for a simple termination filing.
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Hassan Khoury
Whatever you do, make sure you get a copy of the filed UCC-3 termination when they finally do it. Don't just rely on checking the SOS website - get the actual stamped filing copy for your records.
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Madeline Blaze
•Will do. Learned my lesson about keeping better UCC records from this whole mess.
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Victoria Stark
•Yes! And verify the termination actually references the correct UCC-1 filing number. I've seen terminations filed against the wrong original filing.
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Hassan Khoury
•That's a great point about double-checking the filing numbers match. Easy mistake to make but creates huge problems.
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Benjamin Kim
This might sound paranoid but I'd also run a full UCC search on your company name after the termination gets filed. Sometimes lenders have multiple UCC-1s filed and only terminate one of them.
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Madeline Blaze
•Not paranoid at all - this whole experience has made me realize how sloppy some lenders are with UCC filings.
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Lucy Lam
•Smart advice. I've seen cases where equipment lenders filed separate UCC-1s for different pieces of equipment under the same loan.
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Samantha Howard
Update us when you get this resolved! These termination delay stories help other people know they're not alone in dealing with unresponsive lenders.
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Madeline Blaze
•Definitely will update. Going to try the certified letter and CFPB complaint this week.
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Grace Durand
•Good luck! Hope it doesn't take much longer to get cleared up.
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Megan D'Acosta
One more thing - if your new lender is willing to work with you, they might accept a payoff letter and proof of payment as temporary collateral clearance while you're waiting for the termination. Not all lenders will do this but some are flexible on equipment loans.
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Madeline Blaze
•That's a great suggestion. I'll ask them about accepting the payoff documentation temporarily.
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Aidan Hudson
•This is where having all your documents properly verified helps too. Certana.ai's document checker would show your new lender that everything aligns properly between the payoff and original UCC filing, which might make them more comfortable with temporary approval.
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Megan D'Acosta
•Exactly - having clean documentation that clearly shows the relationship between all the filings makes lenders much more willing to be flexible.
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