UCC redemption process tips for filing - need guidance on proper procedure

Good point about timing. Also worth noting that the redemption amount includes not just the debt balance but also reasonable expenses incurred by the secured party. Make sure you get a full accounting before proceeding.

Wait, I thought redemption had to happen within 10 days of notice? Or is that just for consumer goods? This commercial equipment situation might have different rules.

The 10-day rule you're thinking of applies to different situations. For commercial redemption, it's generally until the secured party disposes of the collateral or enters into a contract for disposition. Much more flexible timeline than consumer goods.

That's exactly what I needed to know about the termination filing responsibility. Should I be requesting the accounting in any specific format, or is a standard debt statement sufficient?

Standard debt statement should work, but make sure it itemizes all costs they're claiming - storage fees, insurance, appraisal costs, attorney fees if reasonable. Some lenders try to pad expenses so review everything carefully.

Also get the accounting request in writing and keep copies of everything. I had one case where the lender claimed they never received our redemption request because we only called instead of sending written notice.

Interesting, I hadn't heard of using automated verification for redemption cases. How does it handle the different document types involved in redemption?

You can upload PDFs of all the related documents and it checks for consistency across everything - debtor names, collateral descriptions, filing numbers. Really helpful when you're dealing with multiple document types like UCC filings, loan agreements, and redemption notices.

That sounds useful but probably expensive for smaller redemption cases?

Actually wasn't cost prohibitive at all, and considering the potential liability if we missed something, it was worth it for the peace of mind alone.

Good point about multiple secured parties. In this case it's just one lender, but I'll definitely check state-specific requirements. Are those usually in the state's UCC statutes or separate regulations?

Usually in the state UCC statutes, but some states have specific forms or procedures published by the Secretary of State office. Worth checking both sources.

What happens if the lender refuses to accept redemption payment? I've heard some lenders try to avoid redemption by claiming the amount is insufficient.

If they refuse reasonable redemption payment, you can deposit the funds with the court and proceed with a declaratory judgment action. Most lenders don't want that expense and hassle, so they'll usually work with you.

Also make sure you're calculating interest correctly through the redemption date. Some borrowers miscalculate and then the lender legitimately rejects the payment for being insufficient.

Definitely still valid on timing - filed 18 months ago so we're well within the 5-year window. But good reminder to always check the filing date and any continuation statements.

Yeah, I've seen situations where people went through entire redemption process only to find out the UCC had already lapsed and the security interest was no longer enforceable anyway.

That's a great point I hadn't considered. I'll need to review the security agreement to see what ongoing obligations we have during redemption.

Insurance is definitely important, and sometimes the lender has their own insurance on the collateral that they'll want reimbursed for as part of redemption costs.

How does that work exactly? Do you upload the UCC-1 and it checks against other documents?

You can upload multiple PDFs - the original UCC-1, loan docs, redemption notices, whatever - and it cross-checks things like debtor names, collateral descriptions, amounts, dates. Catches inconsistencies that manual review might miss.

Seems like overkill for most cases, but I guess if you're dealing with complex redemption situations it might be worth it.

If the collateral moved more than 4 months ago and no amendment was filed, there could be perfection issues. But for redemption purposes, you're mainly concerned with satisfying the debt rather than where the collateral is located.

Though if there are perfection problems due to location changes, that might actually strengthen your position in negotiating redemption terms with the lender.

Absolutely - I've learned that lesson in other contexts. Will make sure all communications about redemption terms are documented in writing.

Email works fine for most communications, but for the actual redemption payment and receipt, I'd recommend certified mail or in-person delivery with witnesses.

Will definitely post an update once we get through the process. This thread has been incredibly helpful - lots of practical tips I wouldn't have thought of otherwise.

Same here, I'm bookmarking this thread for future reference. Great practical advice from everyone.

These kinds of detailed discussions are why I love this forum. Way more practical than most legal treatises on UCC redemption.

That's such an important point about partial payments and credits! I've been so focused on the filing mechanics that I hadn't fully considered the accounting reconciliation aspect. With manufacturing equipment, there might also be maintenance or storage costs that the client paid directly that should be credited against the redemption amount. Do you typically request detailed payment histories from both the client and lender to cross-reference, or is there a more efficient way to ensure all credits are captured?

I typically request payment histories from both sides and then create a reconciliation spreadsheet. For equipment cases, don't forget about things like property taxes, registration fees, or licensing costs that might have been paid post-default. Sometimes the borrower paid these directly to avoid liens or keep equipment operational. Also check if there were any insurance claims paid out during the default period - those proceeds should typically be applied to reduce the debt. The key is being methodical about it since lenders don't always volunteer information about credits that reduce their recovery amount.

Great questions! In most states, lenders have a "reasonable time" obligation to file the UCC-3 termination after receiving redemption payment, though the UCC doesn't specify exact timeframes. I typically see anywhere from 10-30 days as standard practice. If they delay filing, you have a few remedies: you can file the termination yourself with proof of redemption payment, or seek damages for any harm caused by the delay (like inability to refinance or sell the equipment). Some practitioners include a specific termination deadline in their redemption notice to create a paper trail if enforcement becomes necessary. Also worth noting that under UCC 9-513, if you send a proper termination demand after redemption and they fail to comply within 20 days, you may be entitled to $500 statutory damages plus actual damages. Document everything and don't let them drag their feet on the filing!