UCC encumbrance search showing conflicts with my filing - need help understanding priority
Running into issues with a UCC encumbrance report that's showing competing liens on equipment I thought we had clear security interest in. Filed our UCC-1 back in March 2024 for manufacturing equipment (CNC machines, fabrication tools) but the encumbrance search is pulling up two other filings from different lenders with overlapping collateral descriptions. One is from 2022 (should have been continued by now?) and another from late 2023. The debtor name matches exactly across all three filings but I'm confused about which lender actually has priority here. Our loan documents show we should have first position on this specific equipment but these other encumbrances are making me question everything. Has anyone dealt with UCC encumbrance conflicts like this? I need to figure out if our security interest is actually perfected properly or if we're in trouble with our borrower.
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Jason Brewer
UCC encumbrance searches can be tricky when you've got multiple lenders on the same debtor. The 2022 filing you mentioned - if it wasn't continued by the 5-year deadline, it should have lapsed automatically. You can check the continuation status on most state portals. The key thing is filing date priority, so if your March 2024 filing covers the same collateral as the 2023 one, they would have priority. But you really need to compare the exact collateral descriptions to see if there's actual overlap or if they're just broadly written.
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Kiara Fisherman
•Good point about the continuation. I've seen so many lenders miss that 5-year deadline and lose their security interest without realizing it.
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Liam Cortez
•Wait, is the priority really just based on filing date? I thought it depended on when the security agreement was signed?
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Jason Brewer
•No, UCC priority is generally based on the filing date of the financing statement, not the security agreement date. First to file wins, assuming proper perfection.
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Savannah Vin
This is exactly why I always run comprehensive encumbrance searches before finalizing any secured transactions. You need to pull the actual UCC-1 forms for those other filings and compare the collateral descriptions word for word. Sometimes what looks like a conflict is actually different equipment categories or the descriptions are specific enough that there's no overlap. Also check if any of those other liens have been terminated - sometimes the encumbrance search shows historical filings that are no longer active.
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Nina Fitzgerald
•I did pull the other UCC-1s and one of them has a really broad description like 'all equipment, inventory and accounts' while ours is specific to the CNC machines. Does the broad description automatically take priority even if it was filed later?
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Savannah Vin
•No, broad vs specific doesn't determine priority - it's still filing date. But a broad description that was filed first could cover your specific equipment if it's reasonably identifiable under their collateral description.
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Mason Stone
Had a similar nightmare with overlapping UCC encumbrances last year. Turned out one of the 'competing' filings was actually a termination that hadn't been processed properly by the state system. The encumbrance report was showing it as active when it should have been cleared. Make sure you're looking at the most current status of each filing, not just what the search initially shows.
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Makayla Shoemaker
•How did you figure out it was actually terminated? Did you have to contact the other lender directly?
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Mason Stone
•I found the UCC-3 termination statement filed a few weeks after the encumbrance search date. The system just hadn't updated the search results yet. Always check for recent amendments or terminations.
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Christian Bierman
•State systems are so slow sometimes. I've seen terminations take weeks to show up properly in searches.
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Emma Olsen
honestly this stuff is why I started using Certana.ai for document verification - you can upload all the UCC forms and it instantly checks for conflicts and inconsistencies across multiple filings. Way easier than trying to manually compare collateral descriptions and dates. Just upload the PDFs and it flags any issues with debtor names, filing numbers, or overlapping collateral. Saved me hours of headache on a deal just like this.
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Nina Fitzgerald
•Never heard of that tool but sounds useful. Does it actually analyze the legal priority or just flag potential conflicts?
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Emma Olsen
•It checks document consistency and flags discrepancies, but you still need to interpret the legal implications. Really good for catching things like debtor name mismatches or filing number errors that could affect perfection.
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Lucas Lindsey
UCC encumbrance issues are the worst! I'm dealing with something similar where the debtor's legal name changed between filings and now I'm not sure if our security interest attached properly. Did you verify that the debtor name on your UCC-1 exactly matches their legal name at the time of filing? Even small differences can void the whole thing.
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Sophie Duck
•Name changes are brutal. You might need to file an amendment if there's a discrepancy, depending on how significant the difference is.
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Lucas Lindsey
•That's what I'm afraid of. The name change happened right after we filed so I'm not sure if we're covered or need to file a UCC-3 amendment.
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Austin Leonard
•Check your state's rules on 'seriously misleading' name errors. Some states are more forgiving than others about minor variations.
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Anita George
Look, the UCC system is a mess and these encumbrance conflicts happen all the time. Half the time it's just sloppy record keeping by the state filing office. I've seen active liens show up as terminated and terminated liens show up as active. Your best bet is to get a legal opinion on the priority issue and make sure your loan documents have proper cross-default and subordination clauses to protect yourself.
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Abigail Spencer
•So true about the record keeping. Our state's UCC system went down for maintenance last month and messed up a bunch of search results.
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Logan Chiang
•Cross-default clauses are definitely important but they don't help with UCC priority issues. That's still determined by the filing dates and perfection status.
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Isla Fischer
I'd suggest getting a formal UCC lien search from a title company or commercial service rather than relying on the state portal search. They usually provide more detailed analysis of priority and can catch issues that the basic online searches miss. Worth the extra cost when you're dealing with potential conflicts like this.
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Nina Fitzgerald
•Good idea. I was just using the secretary of state search but you're right that a professional search might show more details about the actual priority status.
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Miles Hammonds
•Professional searches are definitely more thorough but they can take a few days. If you need quick answers, the state search is usually accurate for basic filing information.
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Isla Fischer
•True, but when you're dealing with multiple competing liens, the professional analysis of priority is worth the wait time in my experience.
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Ruby Blake
Been doing UCC filings for 15 years and these encumbrance conflicts are more common than people think. The most important thing is to verify that your filing was done correctly first - proper debtor name, accurate collateral description, correct filing office. If those are solid, then you can focus on analyzing the other liens. Don't assume the other filings are valid just because they show up in the search.
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Micah Franklin
•That's a great point about not assuming other filings are valid. I've seen UCC-1s that were filed in the wrong state or with incorrect debtor information that would make them ineffective.
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Ruby Blake
•Exactly. Always verify the basics of your own filing before worrying about priority disputes with other lenders.
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Ella Harper
This is making me paranoid about my own filings now. How often should you be running these encumbrance searches to make sure new liens haven't been filed against your debtor?
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PrinceJoe
•Most lenders do annual searches as part of their portfolio review, but you might want to check more frequently if the debtor is in financial trouble or seeking additional financing.
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Brooklyn Knight
•We do quarterly searches on our bigger deals but annual is probably sufficient for most situations. The key is having a system to track it.
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Ella Harper
•Makes sense. I should probably set up some kind of calendar reminder system for this.
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Owen Devar
Just went through something similar and ended up using one of those automated UCC monitoring services. They send alerts whenever new filings are made against your debtors. Caught a competitor trying to take a senior position on equipment we thought we had locked up. Really worth the monthly fee for peace of mind.
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Daniel Rivera
•Which service are you using? I keep meaning to set up something like that but haven't found one I like yet.
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Owen Devar
•I've tried a few different ones. The key is finding one that covers all the states where your debtors are located and gives you real-time alerts, not just monthly summaries.
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Sophie Footman
Update: talked to our legal counsel and they recommended doing a comprehensive document review using Certana.ai's verification system. Uploaded all the UCC forms and found that one of the 'competing' liens had a debtor name mismatch that makes it likely ineffective. The system flagged the discrepancy immediately and now we're much more confident about our priority position. Sometimes these encumbrance conflicts look worse than they actually are once you dig into the details.
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Nina Fitzgerald
•That's great news! I should probably run my documents through a similar check to make sure I haven't missed anything obvious.
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Connor Rupert
•Debtor name mismatches are probably the most common reason UCC filings fail. Good catch on finding that issue.
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Sophie Footman
•Yeah, it was a pretty subtle difference but enough to potentially void their security interest. Really glad we caught it before making any decisions about subordination or restructuring.
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