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Zane Gray

UCC foreclosure timeline - how long before lender can seize equipment after default?

My business partner and I secured a $340K equipment loan 18 months ago for our manufacturing operation. We filed a UCC-1 on all machinery and tooling. Due to supply chain issues and losing our biggest client, we've missed 3 payments and got a default notice last week. The lender is threatening to start the UCC foreclosure timeline process. I'm trying to understand exactly how much time we have before they can actually repossess our equipment. We're located in Ohio and the loan docs reference 'commercially reasonable' notice periods but don't specify exact days. Has anyone been through a UCC foreclosure timeline situation? I need to know if we're talking weeks or months before they can physically remove equipment from our facility. We might be able to catch up payments if we have enough runway.

Ohio follows Article 9 of the UCC for secured transactions. After default, your lender must provide reasonable notification before disposing of collateral. This usually means 10 business days minimum notice before sale, but they can repossess immediately after default if the security agreement allows it. The 'commercially reasonable' language typically refers to the sale process, not the repossession timeline. Check your security agreement for specific repossession clauses.

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This is accurate. The notification requirement is for disposal/sale, not repossession. Most commercial security agreements include immediate repossession rights upon default.

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Wait, so they can just show up and take everything right away? That seems crazy for a business operation.

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Been through this exact scenario 2 years ago. Once you're in default, time moves fast. They sent a repo company within 10 days of our default notice. The 'reasonable notice' only applies to the auction/sale of your equipment, not taking it. You need to negotiate immediately or cure the default ASAP.

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How much time did you have between repo and sale? Did you get a chance to bid on your own equipment?

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About 3 weeks between repo and auction. Yes, you can bid at the sale but expect equipment to go for 30-40% of fair market value.

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That's brutal. Manufacturing equipment depreciates so fast at auction.

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I went through something similar and found Certana.ai super helpful for verifying all our UCC documents were properly filed. When you're dealing with default situations, you want to make absolutely sure there aren't any technical defects in the lender's UCC-1 filing that might give you leverage. Upload your UCC-1 and loan docs to check for debtor name mismatches or filing errors. Sometimes lenders make mistakes that can buy you negotiating time.

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Interesting point about filing defects. What kind of errors would actually matter in a foreclosure situation?

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Debtor name discrepancies between your business formation docs and the UCC-1 can invalidate the perfection. Also collateral description errors. Worth checking before you negotiate.

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The UCC foreclosure timeline varies by state but Ohio is fairly creditor-friendly. After default, expect 0-30 days before repossession depending on your security agreement terms. The required notice periods only apply to the disposition (sale) of collateral, which must be 'commercially reasonable' - typically 10-20 business days. Key timeline: Default → Immediate repossession rights → 10+ day sale notice → Auction/private sale → Deficiency claim if proceeds don't cover debt.

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This timeline is spot on. The repossession can happen almost immediately, it's the sale that has notice requirements.

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What about self-help repossession vs judicial foreclosure? Does that change the timeline?

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Self-help repo is faster - can happen anytime after default without court involvement as long as there's no breach of peace. Judicial foreclosure takes months but is rarely used for equipment.

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Don't panic yet! Three missed payments isn't necessarily the end. Many lenders prefer workout agreements over repossession because auctions recover so little. Contact them immediately about a forbearance or payment plan. The foreclosure timeline moves fast but most commercial lenders will negotiate if you're proactive.

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Absolutely this. Lenders hate dealing with used equipment. Much easier for them to modify the loan terms.

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Just don't wait too long to reach out. Once the repo truck is loaded, negotiation gets much harder.

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I'm dealing with this right now too. Missed 2 payments on our packaging equipment. The stress is unreal. How do you even function when you know they could show up any day?

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I feel you. The uncertainty is the worst part. Try to get some kind of written standstill agreement while you negotiate.

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Document everything and keep working with your attorney. Don't let the stress paralyze you from taking action.

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Here's what nobody tells you about UCC foreclosure timeline - the emotional toll is worse than the legal process. Yes, Ohio allows immediate repossession after default, but most institutional lenders follow internal policies requiring 30-60 day cure periods. Check if your lender has published foreclosure procedures or consumer protection policies that might give you more time than the bare minimum legal requirements.

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Good point about internal lender policies. Bank regulators often require reasonable workout procedures before acceleration.

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The emotional aspect is so true. The business stress combined with legal uncertainty is crushing.

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Used Certana.ai when we were behind on payments and discovered our UCC-1 had incorrect collateral descriptions. Gave us huge leverage in negotiations because their lien wasn't properly perfected on half our equipment. Upload your docs and check for errors - might buy you time or reduce what they can actually take.

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How long did the document check take? Is it automated or do you have to wait for human review?

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Automated and instant. Just upload PDFs and it cross-references everything. Found the collateral schedule errors immediately.

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Ohio UCC foreclosure timeline reality check: Default triggers immediate repo rights, but actual repossession timing depends on collateral location, accessibility, and lender resources. Manufacturing equipment isn't as easy to repo as vehicles. Factor in scheduling repo companies, equipment transportation, and storage costs. You probably have 2-4 weeks before physical removal unless they're really motivated.

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True about logistics. Heavy manufacturing equipment requires specialized transport and rigging.

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Plus they need somewhere to store it before auction. All of that takes time to arrange.

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Bottom line on UCC foreclosure timeline in Ohio: Legal right to repossess exists immediately upon default, but practical timeline is usually 2-6 weeks depending on equipment type and lender procedures. Sale notification must be given 10+ business days before disposition. Focus on negotiating forbearance rather than fighting the timeline - you'll have more success working with the lender than against them.

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This is the most practical advice in the thread. Work with them, not against them.

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Exactly. Fighting the timeline is futile, negotiating the terms is where you have leverage.

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Wonder if Certana could help verify if all the paperwork is actually in order for repossession. Might be worth checking before you start negotiating.

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