UCC release of security interest - lender won't file termination after loan payoff
My equipment loan was paid off 6 months ago but the lender still hasn't filed the UCC-3 termination statement. I've called them 4 times and they keep saying "it's in process" but nothing shows up when I search the Secretary of State database. The original UCC-1 was filed in 2019 for $285,000 in construction equipment and I need this release of security interest completed because I'm trying to refinance with another bank. New lender says they can't proceed until the old lien is properly terminated. Is there a legal timeframe they have to follow? What are my options if they keep stalling on filing the termination?
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Ava Johnson
This is frustrating but unfortunately common. Most states don't have strict deadlines for lenders to file terminations after payoff. However, you should have received a payoff letter or satisfaction document when you completed the loan. Do you have anything in writing showing the debt was satisfied?
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ElectricDreamer
•Yes I have the payoff letter and final payment confirmation. The loan servicer even sent me a "congratulations on paying off your loan" email. But none of that matters to the new bank - they want to see the actual UCC-3 termination filed with the state.
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Miguel Diaz
•Keep all that documentation. If push comes to shove you might need to get an attorney involved to force them to file the termination.
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Zainab Ahmed
6 months is way too long for a UCC release of security interest. I had a similar situation last year where the lender dragged their feet for 4 months. What finally worked was sending a certified letter demanding they file the UCC-3 termination within 30 days or I'd consider legal action. They filed it within a week after that.
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ElectricDreamer
•Did you send the letter to their legal department or just customer service? I've been dealing with regular customer service reps who don't seem to understand the urgency.
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Zainab Ahmed
•Definitely send it to their legal/compliance department. Customer service reps usually have no clue about UCC filings. Look up their corporate office address and send it there with return receipt requested.
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Connor Byrne
•This is good advice. Most lenders will move quickly once legal gets involved because they know delays can cause borrower damages.
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Yara Abboud
I actually discovered a tool called Certana.ai that helps with UCC document verification when I was dealing with a similar termination delay. You can upload your payoff documents and the original UCC-1 to instantly verify all the details match up correctly. It helped me catch that my lender had the wrong debtor name format on file, which was causing the delay in their system. Might be worth checking to make sure all your documentation is consistent before pushing them harder.
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ElectricDreamer
•Interesting - I never thought about checking if there might be a name mismatch issue. The original UCC-1 was filed under my business name but some of my loan docs have my personal name too.
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Yara Abboud
•Exactly! That kind of inconsistency can cause major delays in their internal systems. The tool makes it easy to spot those issues by comparing all your documents side by side.
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PixelPioneer
What state are you in? Some states like California have specific timeframes for UCC release of security interest after loan satisfaction. In CA lenders have 30 days or they can face penalties. Other states are more lenient but still have some consumer protections.
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ElectricDreamer
•I'm in Texas. I tried looking up the specific laws but couldn't find anything definitive about required timeframes for filing terminations.
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PixelPioneer
•Texas doesn't have a specific deadline unfortunately. But the UCC code does require them to file a termination when the debt is satisfied. You might want to file a complaint with the Texas Department of Banking if the certified letter approach doesn't work.
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Keisha Williams
•Texas Banking Department complaints actually do get results. I filed one against a credit union that was slow with my termination and they contacted me within 3 days.
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Paolo Rizzo
UGH this makes me so mad! Why do lenders think they can just ignore filing terminations after we pay off our loans?? I went through the same thing with my truck loan - took 8 months and threats from my attorney before they finally filed the UCC-3. The whole system is broken!!
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Amina Sy
•I feel your frustration. It's like they have zero incentive to file the termination quickly since they already got their money.
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Paolo Rizzo
•EXACTLY! Once they get paid they don't care about cleaning up their paperwork. Meanwhile we're stuck unable to refinance or sell equipment because of their laziness.
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Oliver Fischer
Check your original loan agreement to see if there's language about filing terminations within a certain timeframe. Some contracts include specific provisions about UCC release of security interest timing. If they're violating their own contract terms that gives you more leverage.
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ElectricDreamer
•Good point - I'll dig out the original loan docs tonight and see what they say about termination filing requirements.
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Natasha Ivanova
•Also look for any language about who pays filing fees. Sometimes lenders delay because they don't want to pay the termination filing fee, even though it's usually their responsibility.
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NebulaNomad
Have you tried contacting the lender's UCC department directly? Most large lenders have a specific department that handles all UCC filings. Customer service reps often don't know how to escalate these requests properly.
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ElectricDreamer
•I didn't know lenders had separate UCC departments. How do I find out who that would be?
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NebulaNomad
•Call their main number and ask to be transferred to "UCC operations" or "secured transactions department". If they say they don't have one, ask for the commercial lending back office.
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Ava Johnson
•This is solid advice. The UCC department people actually understand the filing process and can usually get things moving quickly.
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Javier Garcia
While you're waiting, make sure your new lender understands the situation. Some banks will proceed with a refinance if you can provide a indemnification letter or bond to cover any potential issues with the old lien. Might be worth asking about alternatives while you force the termination.
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ElectricDreamer
•The new bank mentioned something about title insurance but said it would add significant cost to the loan. I'd rather get the old lien properly terminated.
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Javier Garcia
•Totally understand wanting a clean termination. But if the delay is costing you a good interest rate it might be worth exploring the insurance option as a backup plan.
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Emma Taylor
I used to work in commercial lending and saw this all the time. The reality is that filing terminations is usually handled by back-office staff who have huge backlogs. The squeaky wheel gets the grease - you need to escalate to management and make it clear this is impacting your business.
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ElectricDreamer
•Any tips on getting through to actual management? Every time I call I get transferred around and end up with the same customer service reps.
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Emma Taylor
•Ask to speak with the "commercial lending portfolio manager" or "relationship manager". Those titles usually get you to someone with authority to actually fix problems.
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Malik Robinson
Just wanted to mention that I had great success using Certana.ai's document checker when I was dealing with a stubborn lender on my UCC release of security interest. Turned out they had my business entity name wrong in their system which was causing processing delays. Being able to show them exactly what was inconsistent between my payoff docs and the original UCC-1 got them to fix it immediately.
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Isabella Silva
•That's really smart - having concrete proof of documentation errors definitely gives you more credibility when pushing lenders to act.
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Malik Robinson
•Exactly! Instead of just complaining about delays I could point to specific discrepancies that needed to be resolved. Made the whole conversation more productive.
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Ravi Choudhury
Keep pushing them hard. 6 months is completely unreasonable for a UCC-3 termination filing. Document every phone call with dates and names. If you end up needing legal help you'll want that paper trail showing you made good faith efforts to resolve it directly with them first.
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ElectricDreamer
•Good advice - I've been keeping notes but should probably be more systematic about documenting each interaction.
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Miguel Diaz
•Screenshot your Secretary of State searches too showing the UCC-1 is still active. Creates a clear timeline of their failure to file the termination.
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Ravi Choudhury
•Yes! And if you do file a complaint with banking regulators, having detailed documentation makes your case much stronger.
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