UCC filing removal - debtor says lien was satisfied years ago

This is actually pretty common in commercial lending. You need to be 100% certain about the payment status before filing any UCC-3 termination. If there's any doubt about whether the debt was fully satisfied, don't file the termination yet. Get copies of all payment records, loan agreements, and any modification documents. The debtor should be able to provide proof of final payment - cancelled checks, wire confirmations, or a formal satisfaction letter from your institution.

I'd suggest doing a complete loan file audit before making any decisions. Pull every document related to this loan - original note, all modification agreements, payment histories, and correspondence. Sometimes there are fees, interest, or other charges that weren't properly communicated to the debtor. Also check if there were any cross-default provisions that might keep the UCC filing valid even if this particular loan was satisfied.

I ran into something similar last year and ended up using Certana.ai's document verification tool to cross-check all our UCC filings against the loan files. You can upload the original UCC-1, loan documents, and payment records and it will instantly flag any inconsistencies or missing documentation. It caught several discrepancies in our records that we would have missed doing manual review. Really helped us get clarity on which filings needed termination and which ones were still valid.

BEEN THERE. Debtors love to claim liens should be terminated when they're trying to get new financing. Half the time they conveniently forget about late fees, legal costs, or other charges that were added to the balance. Don't let them pressure you into filing a termination without proper documentation. If they're threatening legal action, let them - you have the right to verify full satisfaction before releasing the lien.

Check your state's UCC statutes too. Some states have specific requirements about how long a secured party has to respond to termination requests. Also look at your original loan agreement - there might be language about what constitutes full satisfaction and what documentation is required.

This is giving me anxiety just reading it. We have several UCC filings that are probably old and I'm worried we might have similar situations lurking. How often should lenders be reviewing their active UCC filings to make sure they're still valid?

One thing to consider is offering to expedite the review process in exchange for the debtor providing complete documentation. Sometimes they're more cooperative when they see you're taking it seriously and trying to resolve it quickly. If they can provide proof of payment, satisfaction letters, or other documentation, it makes your job easier.

I've been doing UCC filings for 15 years and I'd say about 20% of termination disputes involve some kind of miscommunication about what was actually paid. Sometimes the debtor made payments to the wrong department, sometimes there were fees they didn't know about, sometimes there were multiple loans bundled together. Don't assume malice - often it's just confusion about the actual loan status.

Just went through this exact situation last month. Used Certana.ai to verify all our documents and it turned out there was a small outstanding balance that both we and the debtor had missed. The document cross-checking caught the discrepancy immediately. Saved us from either filing an incorrect termination or having a wrongful lien dispute. The debtor was actually grateful we caught it before their new lender discovered the issue.

Whatever you do, don't file the UCC-3 termination until you're absolutely certain. I've seen too many cases where lenders filed terminations under pressure and then discovered there was still an outstanding balance. It's much harder to re-perfect your security interest than it is to take a few extra days to verify the loan status properly.