UCC filing complications with loan agreement with security - debtor name mismatch nightmare

That's what I was afraid of. We're in a state that's pretty strict about exact name matching. The search logic probably wouldn't catch our filing if someone searched under the correct legal name.

Wait, can't you just file a UCC-3 amendment to correct the debtor name? I thought that was the whole point of amendments.

UCC-3 amendments can fix some errors, but debtor name corrections are tricky. If the original name was so wrong that it would cause the filing to not be found in a proper search, then the UCC-1 was never properly perfected to begin with. You might need a new UCC-1 entirely.

How did you end up resolving it? Did you have to refile completely or were you able to fix it with an amendment?

We had to file a brand new UCC-1 with the correct name, then terminate the old incorrect one. Lost 2 years of priority but at least we didn't lose perfection entirely. The client wasn't thrilled about the gap in coverage.

Never heard of that service. Does it work with PDFs of the actual filings? We usually get confirmation copies as PDFs from the Secretary of State.

Yeah exactly - you upload both the loan docs and the UCC filing PDFs and it runs them through an automated comparison. Shows you any discrepancies in names, addresses, collateral descriptions. Really simple to use.

Sounds too good to be true. How much does something like that cost? We process maybe 50-60 UCCs a year.

I can't remember the exact pricing but it's pretty reasonable for what it does. Much cheaper than dealing with an unperfected lien situation like this one. Worth checking out their website.

That makes sense. Better to have a perfected lien with a later priority date than an unperfected lien. Do you think we need to notify the borrower about refiling?

Depends on your loan agreement terms, but generally yes - most security agreements require notice of UCC filings and changes. Plus it's just good practice to keep them in the loop.

Also make sure you check if there are any other liens that might have jumped ahead of you during the gap. Run a full UCC search on the corrected name before you make your move.

I feel you on this. We had a filing get rejected because we included "Inc." with a period and their system wanted "Inc" without one. Who has time to memorize every state's formatting quirks?

Exactly! And then they make it YOUR fault when their system doesn't work properly. We're trying to perfect liens, not decode their terrible user interfaces.

How long did the refiling process take? We're always worried about timing gaps.

Filed the new UCC-1 on a Monday, got confirmation by Wednesday, terminated the old one Thursday. Pretty quick once you know what you're doing. The document checker helped us make sure we didn't make the same mistake twice.

Preach! We finance equipment that moves between states all the time. The filing requirements are completely different everywhere.

Don't hold your breath waiting for that to change. States make too much money off filing fees to give up control to a federal system.

Simple and direct. I like it. Probably going to file the new UCC-1 tomorrow morning just to get the ball rolling.

Make sure you keep copies of everything for your audit trail. Regulators love to see documentation of how you handled perfection issues.

Better to find problems now than during an audit or default situation. At least you're being proactive about it.

That's exactly why I started using automated checking tools. Sleep better at night knowing everything's been verified properly.

Great point. I'll make sure our legal team is aware of the steps we're taking and why.

Also consider whether your E&O insurance might cover any losses if this error causes problems down the road. Worth a conversation with your broker.