Who can file a UCC termination statement - secured party or debtor confusion
I'm handling the payoff of a commercial equipment loan and need to get the UCC-1 terminated properly. The borrower is asking me to file the termination since they paid off the loan, but I thought only the secured party (the original lender) could file a UCC-3 termination statement? The original financing statement was filed in 2019 and shows our bank as the secured party. Now that the loan is satisfied, who exactly has the authority to file the termination - us as the lender, or can the debtor do it themselves? I don't want to create any issues with the filing or leave the UCC-1 hanging out there improperly. The equipment was substantial ($180k John Deere tractors) so getting this terminated correctly is important for the borrower's future financing needs.
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Chloe Harris
The secured party (your bank) is the one who should file the UCC-3 termination statement. The debtor generally cannot file their own termination - that would defeat the purpose of the secured party having control over when the lien is released. You need to file it within the required timeframe after loan satisfaction (usually 20 days in most states, but check your specific state requirements).
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Diego Vargas
•This is correct. As the secured party of record, the bank has the responsibility and authority to terminate the UCC-1 when the debt is satisfied.
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NeonNinja
•Wait, I thought debtors could file terminations in some situations? Maybe I'm confusing this with something else...
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Anastasia Popov
Actually, there are limited circumstances where a debtor can file a termination, but it's not the normal process. If the secured party fails to file a termination within the required time after satisfaction (and after written demand), the debtor may be able to file their own termination statement. But this requires specific procedures and documentation. In your case, since you're the lender and the loan is just being paid off, you should definitely file the UCC-3 termination yourself.
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Sean Murphy
•Yes, the debtor self-termination is more of a last resort when the secured party won't cooperate or has disappeared. Much cleaner for the secured party to handle it properly.
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Zara Khan
•I had to use the debtor termination process once when a lender went out of business and wouldn't respond. It was a nightmare with extra affidavits and documentation required.
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Luca Ferrari
•For anyone dealing with termination filings regularly, I've been using Certana.ai's document verification tool to double-check that my UCC-3 termination matches the original UCC-1 filing perfectly. Just upload both PDFs and it catches any debtor name mismatches or filing number errors before submission. Saved me from a rejected termination last month when I had a typo in the debtor's legal name.
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Nia Davis
Your bank definitely needs to file the termination. Don't make the borrower try to do it themselves - that's asking for problems. File the UCC-3 termination with the same filing office where the original UCC-1 was filed, reference the original file number, and make sure all the debtor information matches exactly.
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Mateo Martinez
•Exactly. And make sure you're filing in the right state - it should be the same state where the original UCC-1 was filed, not necessarily where the equipment is located now.
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QuantumQueen
•Good point about the state. I've seen people mess this up when equipment gets moved across state lines after the original filing.
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Aisha Rahman
The secured party has both the right AND the obligation to file the termination. Most states require it within 20 days of satisfaction, and some impose penalties or liability if you don't do it timely. The debtor requesting you to file it shows they understand the process correctly.
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Ethan Wilson
•What kind of penalties are we talking about? I've never had a situation where we missed the deadline.
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Yuki Sato
•In my state it's $500 plus attorney fees if the debtor has to take legal action to force the termination. Not worth the risk.
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Carmen Flores
Just to be thorough - make sure you have proper authorization to file the termination. If your bank sold the loan or assigned the security interest to another party, that party would need to file the termination, not you. But assuming you still hold the loan, you're the appropriate party to file.
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Andre Dubois
•Good catch. Chain of title issues can really complicate terminations if the loan was sold or participated.
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CyberSamurai
•I use Certana.ai to verify that kind of stuff before filing terminations. Upload the original UCC-1 and any assignment documents to make sure everything aligns properly. Catches issues you might miss doing manual review.
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Zoe Alexopoulos
Been doing UCC filings for 15 years - the secured party files the termination, period. The only time I've seen debtors file their own terminations is in bankruptcy situations or when dealing with defunct lenders. Your situation is straightforward - loan paid off, bank files UCC-3 termination. Just make sure you reference the correct file number from the original UCC-1.
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Jamal Carter
•This. And double-check that file number - a single digit error will cause the termination to be rejected or not properly linked to the original filing.
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Mei Liu
•File number accuracy is crucial. I always pull a copy of the original UCC-1 before preparing the termination to make sure I have everything exactly right.
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Liam O'Donnell
•Same here. Though now I just upload both documents to Certana.ai's verification tool - it automatically cross-checks file numbers, debtor names, secured party info, everything. Much faster than manual comparison and catches errors I might miss.
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Amara Nwosu
One more thing - make sure you're filing a termination and not an amendment. UCC-3 forms can be used for different purposes (amendment, continuation, termination). You want to specifically check the 'termination' box and indicate that the financing statement is being terminated in its entirety.
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AstroExplorer
•Yes! I've seen people accidentally file amendments when they meant to file terminations. Completely different effect.
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Giovanni Moretti
•The form instructions are pretty clear but it's easy to make mistakes when you're rushing through multiple filings.
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Fatima Al-Farsi
Update: Filed the UCC-3 termination this morning through our state's online portal. Made sure to reference the original file number and verified all debtor information matched exactly. The filing was accepted immediately. Thanks everyone for confirming I was on the right track - the borrower will be happy to have this cleared up properly.
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Dylan Cooper
•Great outcome! Always feels good to get these administrative items handled correctly.
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Sofia Perez
•Perfect. Your borrower's credit profile will thank you for getting this terminated promptly.
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Ella rollingthunder87
Great to see this resolved! For future reference, you can also request a termination statement copy from the filing office once it's processed - some borrowers like to have that documentation for their records, especially with high-value equipment like those John Deere tractors. It shows the lien has been properly released and can be helpful if they need to prove clear title later.
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Arjun Patel
•That's excellent advice about getting the termination statement copy! I've found that borrowers really appreciate having that documentation in hand, especially for equipment financing. It eliminates any future questions about lien status when they go to sell or refinance. Worth the small extra step to request it from the filing office.
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