UCC Document Community

This happened to my business partner too. Turned out the bank filed the UCC-3 but used slightly different business name formatting, so the termination didn't properly link to the original UCC-1. Had to be refiled with correct debtor name matching.

I went through something similar last year with a piece of equipment I financed. The key thing is to act quickly - that 30-day window they mention is real. First, do a UCC search on your state's Secretary of State website to see what's currently active under your business name. If you find a UCC-1 that should have been terminated when you paid off your equipment loan, gather all your payoff documentation (loan closure letter, final payment receipts, etc.) and contact your former lender's loan servicing department immediately. Don't just call - send a formal written request for them to file a UCC-3 termination statement. Keep records of everything. These zombie filings can really complicate future financing if left unresolved.

Bottom line - UCC 1-103 argument and recourse is a real thing but it's not a get-out-of-jail-free card for debtors. If your security interest is properly perfected and your loan terms were reasonable, you should be in good shape. Document everything about the original loan process and be prepared to show it was arm's length negotiation.

I've been following UCC 1-103 challenges for a while and they're definitely becoming more common in Chapter 11 cases. The key thing to remember is that even if they successfully invoke common law principles, they still have to prove those principles actually apply to your specific situation. Unconscionability has both procedural and substantive elements - they need to show unfair dealing AND unfair terms. From what you've described (market rate interest, 30-day cure period, sophisticated borrower with counsel), this sounds like a standard commercial deal. I'd focus on documenting the arm's length nature of the original transaction and the borrower's sophistication level. The fact that they had legal representation during the loan process is going to be your strongest defense against any unconscionability claim.

For what it's worth, I've found that paying close attention to the filing details upfront saves way more money than trying to find cheaper states. Getting it right the first time is key.

Thanks everyone for the input. Sounds like the fee increases are pretty universal and we just need to adjust our budgets accordingly. At least we're all dealing with the same issues.

Bottom line - yes, you need the termination filed. It's not optional if you want a clean slate for future financing. Contact your lender ASAP and confirm they're handling it. If they drag their feet, escalate it or explore filing it yourself depending on your state's rules. This is basic housekeeping that prevents bigger headaches later.

One thing I'd add is to keep documentation of the entire process. Save copies of your payoff letter, any correspondence with the lender about the termination, and the actual UCC-3 filing when it's completed. I've seen situations where businesses needed to prove a security interest was properly terminated years later during M&A due diligence or major refinancing. Having that paper trail readily available can save significant time and legal costs down the road. Also, if you're planning to refinance next year as you mentioned, new lenders will definitely want to see that old UCC filing has been cleaned up - it's one of the first things they check in their collateral analysis.

This entire discussion has been incredibly valuable! As a newcomer to business financing, I had no idea how complex UCC filings could be. A few key takeaways that really stood out to me: 1) The importance of exact name matching between your business formation documents and the UCC filing - seems like this trips up a lot of people, 2) The 5-year expiration requiring continuation statements for longer loans, 3) The fact that these are public records that competitors can search, and 4) Filing in your state of organization rather than where assets are located. One thing I'm still curious about - for businesses that have both equipment loans and working capital lines of credit, do you typically end up with multiple UCC filings, or can one filing cover multiple types of collateral from the same lender?

This thread has been absolutely enlightening! As someone just starting to navigate business financing, I had no idea that UCC filings were even a thing, let alone how intricate the process can be. The detail everyone has shared here - from the $10 California filing fee to the complexity of fixture filings - really shows how much goes into secured lending that borrowers never see. I'm particularly struck by how many ways things can go wrong: name mismatches, missed continuation filings, forgetting termination statements when loans are paid off. It seems like having good documentation practices and maybe using verification tools like some mentioned could save a lot of headaches. Thanks to everyone who shared their real experiences - hearing about actual rejections and mistakes makes this feel much more concrete than just reading legal definitions online.