UCC Termination Statement - How to Properly Terminate UCC Filing After Loan Payoff

Is that 20 days from when the loan is officially paid off or from when they receive the final payment? My bank took forever to process our final payment and I'm worried the clock didn't start ticking until they actually posted it.

It's typically from when the obligation is satisfied, not when they process the payment. So if you made the final payment that brought your balance to zero, that's usually when the clock starts. Keep records of when you made that payment.

That's a good point about requesting a copy. I'll definitely do that once they file it. Did you notice any issues with the termination when you got your copy back?

Mine was fine but I've heard of cases where lenders accidentally file amendments instead of terminations, or they get the filing number wrong. Always worth double-checking since a botched termination can cause headaches later.

Actually had a client whose lender filed a UCC-3 amendment instead of a termination by mistake. Took months to sort out because nobody caught it initially. The UCC filing was still active and caused problems when they tried to refinance.

That sounds really useful! Did it help you resolve the discrepancy or did you still have to deal with the lender directly?

It gave me the documentation I needed to show the lender their mistake. Without that verification tool I probably never would have caught it and it could have caused issues down the road. Made the whole process much smoother.

Never heard of that service but it sounds like a smart way to avoid problems. How long does the verification take?

Pretty much instant once you upload the documents. Way faster than trying to manually compare all the details yourself.

Good point about the delay in the system. I've seen it take up to 10 business days in some states for terminations to reflect in online searches.

Thanks for that heads up. I would have definitely been calling them in a panic if I searched right away and still saw the filing active.

Three months is ridiculous. At that point you probably had grounds for damages if it caused you any problems with other financing.

It did actually cause issues! We were trying to get a line of credit and the new lender saw the active UCC filing and questioned whether our equipment was already pledged as collateral elsewhere. Total headache.

That's exactly why the law requires prompt termination. These delays can have real financial consequences for borrowers.

How formal does the written demand need to be? Like do I need a lawyer to write it or can I just send them a letter myself?

You can write it yourself. Just clearly state that you've satisfied the debt, reference the original UCC filing number, and demand they file the termination within the required timeframe per state law. Keep a copy and send it certified mail.

I'd also mention in the letter that you're aware of your rights to recover damages and fees if they don't comply. Sometimes that extra nudge helps move things along.

How can you tell the difference when you get the filed copy back?

The UCC-3 form will specifically indicate whether it's a termination, amendment, continuation, or assignment. For a full termination, it should clearly state that the entire financing statement is being terminated.

You're right that most borrowers don't understand UCC filings until they need to. The system is designed more for lenders and attorneys than regular business owners.

exactly! Like why don't they just automatically terminate these things when the loan is paid off instead of making it this whole separate process

Some lenders do have automated systems for terminations now, but unfortunately not all of them. The manual process leaves too much room for delays and errors.

Will do! Calling them again tomorrow morning. This thread has given me a lot more confidence about what to ask for and what my rights are.

Good luck! The squeaky wheel gets the grease with these things.

Smart approach. Better to catch mistakes early than deal with complications later when you need clean collateral for new financing.

Exactly. Especially with equipment financing where you might want to refinance or use the same collateral for future loans.