UCC judicial foreclosure complications with mixed collateral - need guidance on proper termination sequence
Working through a judicial foreclosure where the debtor had both real property and equipment as collateral under separate UCC-1 filings. The court ordered sale went through last month, but now I'm confused about the proper sequence for UCC terminations. The real estate sold for enough to cover that portion, but the equipment auction fell short. Do I need to file UCC-3 terminations for the satisfied portions immediately, or wait until the entire case is resolved? The original UCC-1s were filed in 2019 and 2020, so continuations aren't an issue yet. Bank's counsel is being vague about their preferred timeline and I don't want to mess up the lien priority for the remaining deficiency. Anyone dealt with partial satisfaction scenarios in judicial foreclosure context?
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CosmicVoyager
Partial terminations can be tricky in judicial foreclosure situations. Generally you'd file UCC-3 partial releases for the satisfied collateral immediately after the court confirms the sale. Don't wait for full case resolution - that could create problems with your perfection status on the remaining assets.
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Ravi Kapoor
•This is correct approach. I learned this the hard way when I waited too long on a similar mixed-collateral foreclosure. File the partial terminations within 30 days of sale confirmation to avoid any perfection gaps.
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Freya Nielsen
•But what about the deficiency calculation? Won't partial termination now affect how they calculate what's owed on the remaining equipment? Seems like you'd want everything settled first.
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Omar Mahmoud
I ran into this exact scenario last year with a manufacturing client. The key is distinguishing between UCC terminations and debt satisfaction. You can terminate liens on satisfied collateral while maintaining claims on unsatisfied portions. Document everything meticulously for the deficiency proceedings.
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Chloe Harris
•Good point about documentation. Are you using any automated systems to track all these UCC-3 filings? I'm drowning in paperwork trying to keep track of which assets got satisfied in which order.
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Omar Mahmoud
•Actually yes - I started using Certana.ai's document verification tool after making a costly mistake on debtor names. You can upload your UCC-1s and proposed UCC-3 terminations to verify everything matches properly before filing. Saved me from several potential errors in complex multi-collateral situations like yours.
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Diego Vargas
Wait, are we talking about full terminations or partial terminations here? Because if you're keeping liens on some collateral you need UCC-3 amendments, not terminations. Termination would wipe out your entire security interest.
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Isabella Ferreira
•Good catch - I meant partial releases/amendments for the satisfied real property portion. Full termination only after everything is resolved. This is why I'm nervous about messing up the sequence.
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NeonNinja
•Yeah the terminology matters here. UCC-3 Amendment to remove satisfied collateral from the collateral description, not full termination. Common mistake that can void your remaining security interest.
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Anastasia Popov
•EXACTLY! I see people mess this up constantly. Amendment removes specific collateral, termination kills the whole filing. Big difference in judicial foreclosure context.
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Sean Murphy
Been through several judicial foreclosures with mixed collateral. You definitely want to amend the UCC-1 to remove satisfied assets ASAP after court confirmation. Waiting creates unnecessary complications for deficiency collection on remaining assets.
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Zara Khan
•How quickly is ASAP? My state's SOS system has been really slow lately and I'm worried about timing issues with the court deadlines.
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Sean Murphy
•Usually within 20-30 days is fine, but check your state's specific requirements. Some states have faster deadlines for post-sale UCC modifications in judicial proceedings.
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Luca Ferrari
This is why I hate mixed collateral cases. Too many moving parts and everyone has different opinions on proper procedure. Have you considered just keeping everything in place until final resolution? Might be simpler even if not technically optimal.
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Nia Davis
•That's risky advice. Keeping liens on satisfied collateral can create issues with title insurance and future financing for buyers. Better to clean up the record promptly.
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Mateo Martinez
•Plus the court might require clear title delivery within specific timeframes. Can't just leave old liens hanging around indefinitely.
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Luca Ferrari
•Fair points. I'm just gun-shy after dealing with SOS rejection issues on UCC-3 filings that had minor debtor name discrepancies.
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QuantumQueen
Speaking of UCC-3 rejections - definitely double-check your debtor names match exactly between the original UCC-1 and your amendment. Courts sometimes use slightly different entity names in their orders than what's on your original filings.
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Aisha Rahman
•This happened to me! Court order said 'ABC Manufacturing Inc' but our UCC-1 had 'ABC Manufacturing, Inc.' - comma difference caused rejection. Had to refile and explain the delay to everyone.
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Ethan Wilson
•I use Certana.ai now to catch those kinds of discrepancies before filing. Upload both the original UCC-1 and the new UCC-3 and it flags any name mismatches automatically. Wish I'd known about it earlier.
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Yuki Sato
One more consideration - make sure your UCC-3 amendment clearly describes which specific assets are being released. Generic descriptions can cause problems if there's any dispute about what was actually sold at auction.
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Carmen Flores
•Yes! Be specific. 'Real property located at...' rather than just 'real estate'. Equipment should reference serial numbers or detailed descriptions from the original collateral schedule.
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Andre Dubois
•And keep copies of the auction documentation to support your amendment filings. Might need to prove which specific assets were sold if anyone challenges the partial release later.
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CyberSamurai
Just went through this exact situation three months ago. Filed UCC-3 amendments within two weeks of court confirmation for the satisfied portions. No issues with deficiency collection on remaining assets. Bank was happy with the clean record-keeping.
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Isabella Ferreira
•That's reassuring. Did you coordinate with the bank's counsel beforehand or just proceed based on the court order?
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CyberSamurai
•Court order was clear enough that I felt comfortable proceeding. Just made sure to copy bank counsel on all filings so they knew what was happening.
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Zoe Alexopoulos
For what it's worth, I had a case where we waited too long to amend the UCC filings and it complicated the deficiency judgment proceedings. Judge questioned why we still had liens on satisfied collateral. Better to be proactive.
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Jamal Carter
•How long did you wait? Trying to gauge what 'too long' means in practical terms.
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Zoe Alexopoulos
•About 90 days. Judge thought it looked like we were trying to maintain improper leverage over satisfied assets. Caused unnecessary hearings and delays.
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Mei Liu
•90 days is definitely too long. Most judges expect UCC clean-up within 30-45 days max after asset disposition in judicial foreclosure context.
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Liam O'Donnell
Bottom line - file your UCC-3 amendments promptly for satisfied collateral, keep detailed records of what was released when, and maintain your perfected status on remaining assets. Don't overthink it but don't procrastinate either.
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Isabella Ferreira
•Thanks everyone. Sounds like the consensus is to proceed with UCC-3 amendments for the satisfied real property portion within the next couple weeks. I'll coordinate with bank counsel and make sure all the debtor names match exactly.
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Amara Nwosu
•Good plan. And definitely use some kind of verification tool if you have access to one. These multi-filing situations are where small mistakes can cause big problems.
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