How To Remove A UCC Filing

Last updated on July 29, 2023

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UCC filings are common occurrences whenever loans are taken out to allow the creditor to inform other creditors about the particular assets from the debtor that are used as collateral in the deal. The information is filed with the local secretary of state’s office. The UCC filing won’t harm the borrower unless anything is left unpaid - but it’s helpful to remove them.

There are two ways to remove a UCC filing. You can visit the office of your local secretary of state or ask the lender to terminate the lien once everything has been paid back in full.

If you’re curious about how to remove a UCC filing, you’re in the right spot. Read on to learn more about removing a UCC filing from your history, whether or not a borrower can terminate a UCC, how to possibly get around a UCC and other helpful information. As a borrower, it’s ideal to know how to remove a UCC filing for your security.

How To Remove A UCC Filing

If you’re interested in removing a UCC filing, it isn’t impossible to accomplish. However, you will need to meet specific criteria and ensure you have paid the lender in full if they also meet all the standards for the filing. Although it’s not always possible to remove the filing, there are several tactics you can attempt.

Let’s dive into the two available methods to remove a UCC filing. Whether you want to speak personally with the secretary of state or talk to your lender about terminating the contract once you’ve paid everything back, there is always something available for you as the borrower. One might be better than the other in different situations.

Visit Your Secretary of State’s Office

The first thing you can do is visit the office of the secretary of state. To locate any filings against your company, go to the website of your secretary of state. There you should be able to check to see your business credit reports. You can then visit the office in person to work things out.

You can also attempt to remove your UCC filing through the secretary of state if the lender doesn’t file a UCC-3 report after you’ve finished repaying the debt in full. When approaching this method, invest in a UCC lien attorney to provide the best opportunity at removing a UCC filing once it’s the proper time.

Approaching the secretary of state for the removal of a UCC filing isn’t always the right move. Sometimes, it’s easiest to ask the lender to terminate the lien.

Ask the Lender To Terminate the Lien

If you’ve paid off your debt in full, remoting a UCC filing can be as simple as asking the lender to remove the lien. The moment you pay it off, speak with your lender and request that they file a UCC-3 with the secretary of state as soon as the deal is done. The UCC-3 will remove the UCC-1 filing and terminate the lien on your company’s critical assets.

However, it’s vital to note that even removing the lien from your assets may not take it away from your business credit report. Typically, the lien will not disappear from this area unless the lien hasn’t been in action for 11 years or the UCC filing receives a request from the customer associated with the report.

No matter what you choose, there are options to help remove the UCC filing from your history. Even if you think there’s a minimal chance you will be able to terminate the lien, it’s always worth a shot to end your time with the lender.

Can A Borrower Terminate A UCC?

Generally, it’s on the borrower to initiate the process to end a UCC lien. However, they typically cannot begin this process until the final payment has been made on the indebted amount or another issue appears that requires a sudden end to the borrowing process between both parties.

In an ideal world, it would make sense that the debtor would be able to end the lien as soon as the agreement is over. Unfortunately, the borrower doesn’t always have the freedom to bring things to a solid conclusion as quickly as would seem reasonable in these situations.

As mentioned above, if the UCC-1 does not close at the end of the borrowing session, you can speak with the secretary of state to learn more about the possibility of closing the UCC-1 lien. To complete this act, you must swear under oath that you’ve completed all your payments and nothing else remains.

The best course of action is to submit a UCC-3 filing request with your lender as soon as the transaction ends. The sooner you take care of things, the better for the future of your business.

How Do You Get Around A UCC Lien?

Although it might seem easy to get around a UCC lien, it’s impossible to remove one from your business history until the end of your indebted period and even beyond. You must complete every payment until it’s time to speak to your lender or the secretary of state about ending the UCC lien on your record.

Luckily, a UCC lien isn’t critical as long as you commit to your part of the loan. However, failing to make your payments could seriously impact your credit score, hurt your ability to get additional finances in the future, and even put your company’s assets at serious risk.

Does A UCC Filing Expire?

Most of the time, filings will last five years from when they were initially filed. Once this time has gone by, the lien is considered lapsed and is no longer valid for the loan. Lenders must reapply or risk putting their loan on the line if the borrower defaults on what they owe. A lender with no UCC filing is at risk of not getting their assets back.

The lender should aim to extend the UCC filing before the five years are up to ensure they remain covered throughout the process. The continuation statement must be filed at least six months before the official end date of the original UCC filing already in the system.

Can You Dispute A UCC Filing?

If you are a borrower, you might notice inaccurate UCC lien information on your credit report. This information is concerning and could impact future business transactions. If you see a lien and know it’s incorrect, it’s vital to dispute it as soon as possible to ensure your business is in proper standing with other potential lenders.

Typically, an issue will come up in the form of an outdated UCC lien filing on your credit report. If this trouble is the case, you can contact the credit reporting agency to get it taken off your report. However, it’s also critical to note they aren’t required to remove the UCC filing by federal law.

Other than this area, it’s rare you will be able to dispute a UCC filing. Take caution when approaching these potential issues.

What Happens When A UCC Is Terminated?

There is removing a UCC lien, and then there is terminating the item. What happens if you decide to terminate the UCC? Why might someone choose to terminate a UCC?

Termination of a UCC can happen for a few reasons, such as the following:

• The loan was repaid
• The lien was removed
• Another obligation was met

These will be the result of this action between both parties.

Once a UCC is terminated, it shouldn’t show up on your record. The terminated UCC filing will thus cease to be effective, removing its power from your life as a business professional.

Can A UCC Lien Freeze Your Bank Account?

Although it’s uncommon, a UCC lien could freeze your bank account in the right situation. However, a creditor cannot freeze your bank account unless there is some kind of judgment on it. Then, the freeze is a unique form of pressure to inspire payments once again.

If you stick with your payments, it’s unlikely a UCC lien will freeze your bank account. However, it never hurts to reach out to your lender to see what possibilities exist for your current situation.

Can A UCC Filing Affect Your Credit Card?

Most of the time, a UCC filing will not do anything to impact your credit card. It’s simply an affirmation from the lender to prove to other lenders their assets and what they receive, secured if the loan defaults on the borrower's side.

However, issues may arise later down the line. A UCC with enough neglect can lead to a dropping credit score, which in turn might end up causing trouble in future borrowing decisions and even lost equipment and resources for your business. A UCC filing can impact your credit card - but only if you let it.

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