UCC Lien Removal
A financing statement is self-filed and nobody verifies it. That is why so many MCA filings are overbroad, unauthorized, or simply stale, and why they can be attacked.
- 20 days after demandUCC 9-513(c)
- $500 per failure, plus damagesUCC 9-625(e)
- Only authorized filings are effectiveUCC 9-509
Financing statements are self-filed. Nobody checks them.
A UCC-1 financing statement is not a court filing and not an adjudication of anything. The secured party submits it to a filing office (in New York, the Department of State), and it is indexed. Nobody verifies that you authorized it, that the collateral description matches what you agreed to, or that anything is still owed. That structural absence of review is exactly why MCA funders file so freely.
Under UCC § 9-509 a person may file a record only if the debtor authorized it. Authorization generally comes from the debtor signing (the Code says “authenticating”) a security agreement, and it reaches only the collateral described in that agreement. A filing that goes beyond the authorization is, to that extent, ineffective under UCC § 9-510.
The four patterns we see over and over
- Blanket all-assets filings on a receivables-only authorization. The agreement grants an interest in future receivables. The UCC-1 describes all assets, equipment, inventory, fixtures, general intangibles and proceeds. The excess is unauthorized.
- Filings left on record after payoff. The advance was repaid in full two years ago and the financing statement is still indexed, because nobody at the funder has any reason to file a termination unless somebody makes them.
- Filings against entities that never signed. Affiliates, holding companies, a successor LLC, sometimes an entity with a similar name. These are unauthorized outright.
- Duplicate and stacked filings. Five funders, eight filings, several of them by brokers or servicers rather than by the party actually holding the obligation.
UCC 9-513(c): 20 days after your authenticated demand
Where nothing is still owed and the funder has no commitment to advance more (in the Code's words, no outstanding secured obligation and no commitment to give value), the secured party must, within 20 days after receiving the debtor's authenticated demand, file a termination statement or send one to the debtor for filing.
If it does not, UCC § 9-625 provides for actual damages caused by the failure, plus a statutory penalty of $500 for each failure to comply. That penalty is what converts a letter a funder would otherwise ignore into a letter its counsel answers.
How we run it
- Search comprehensively, not just where you expect. The New York Department of State index, plus every state where the entity is organized, has assets, or has done business. Under UCC § 9-307 and § 9-501 the correct filing office follows the debtor's location, and funders get that wrong often enough that stray filings sit in states you would not think to check.
- Map each filing to its authorization. We line up the collateral description in each UCC-1 against the language of the agreement the debtor actually signed. This is where overbreadth and outright unauthorized filings surface.
- Demand an accounting where the balance is disputed. UCC § 9-210 lets the debtor request a statement of account or a list of collateral, and imposes a response deadline on the secured party. A funder that cannot substantiate a balance is a funder with a weaker position on everything else.
- Serve the authenticated termination demand. Correctly addressed, properly authenticated, and sent with proof of receipt, because the 20-day clock runs from receipt and you will want to prove the date.
- Enforce, or file an information statement, or both. Non-compliance is actionable under UCC § 9-625. Separately, UCC § 9-518 allows a person to file an information statement identifying a record as wrongfully filed. That is useful for putting your position on the public index while relief is pursued, though it does not by itself remove the filing.
Tell us the date, and we work backward from it
Stale and overbroad UCC filings usually surface at the worst moment: an SBA application, a bank line, a sale of the business, a landlord's estoppel certificate. The demand, the escalation and, if necessary, the judicial application can be sequenced against a real closing date. A documented 9-513(c) demand with a statutory penalty behind it can be enough for a lender to proceed on a subordination or an escrow in the interim.
The dates that govern
| Event | Governing rule | Timetable |
|---|---|---|
| Termination statement after authenticated demand | UCC § 9-513(c) | 20 days after the secured party receives the demand, where there is no obligation and no commitment to give value. |
| Remedy for failure to terminate | UCC § 9-625(b), (e) | Actual damages caused by the failure, plus a $500 statutory penalty per failure. |
| Request for accounting or list of collateral | UCC § 9-210 | The secured party must comply within 14 days after receipt of the request. |
| Effect of an unauthorized filing | UCC § 9-509, § 9-510 | Ineffective to the extent it was not authorized. There is no waiting period; the defect exists from filing. |
| Financing statement lapse | UCC § 9-515 | Generally five years from filing unless continued. Waiting for lapse does not help you on a closing timeline. |
| Information statement | UCC § 9-518 | May be filed at any time; it records your position but does not remove the filing. |
General information, not advice on your filings. Which filings are unauthorized, which are merely overbroad, and what remedy is worth pursuing depend on your agreements and the actual index records. Statutory citations are to the Uniform Commercial Code as adopted in New York; other states' provisions and case law differ.
What to send us
- Every funding agreement, including any you believe was fully repaid.
- Payoff letters, final statements, or bank records showing the advances were satisfied.
- The UCC search results you have, if a lender or buyer ran them and gave you a copy.
- Your exact legal entity names and states of organization, including affiliates and predecessors.
- Any closing, funding or application deadline you are working against.
A UCC-1 is a form somebody typed. Nobody checked it.
There is no examiner, no hearing and no proof of authorization at the counter, which is why so many of these filings are wrong. Four boxes carry the whole question.
- The debtor name was typed in by the filer
Under UCC § 9-509 a filing is effective only so far as the debtor authorized it. Nothing is verified when it is filed, so filings against affiliated entities that never signed anything are routine.
- The secured party may not be who you dealt with
Funders assign, sell and service. A termination has to be demanded from whoever is the secured party of record now, and UCC § 9-210 gives you a way to make them account for what they claim is still owed.
- “All assets” is usually broader than what you signed
Most agreements authorize a filing against receivables. A blanket all-assets description goes beyond that, and it is unauthorized to the extent of the excess. That is a different argument from disputing the debt, and a much shorter one.
- It sits there for five years, and it kills closings
A lapsed or satisfied filing still shows on a search until somebody terminates it. Once there is no obligation and no commitment to give value, UCC § 9-513(c) requires a termination statement within 20 days after your authenticated demand, and UCC § 9-625 puts a number on ignoring it.
If a bank loan, an SBA application or a sale of the business is pending, say so and give us the closing date. The demand and any follow-up can be timed to it.
The first three days, and day 21
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Hour 0
Run the searches
New York Department of State plus every state where the entity or its assets sit. Blanket filings the owner has never seen turn up here.
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Day 1
Serve the demand
An authenticated demand for a termination statement under UCC 9-513(c). The 20-day clock starts on receipt, so it goes out by a method that proves receipt.
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Day 21
Enforce
If no termination is on file, an action under UCC 9-625 for actual damages plus $500 per failure, with an information statement under UCC 9-518 on the public record in the meantime.
Frequently asked
Practically, yes. There is no advance-notice requirement and no verification step at the filing office. Legally, the filing is only effective if you authorized it, which under UCC § 9-509 generally means you authenticated a security agreement covering the collateral described. Plenty of MCA filings exceed that authorization or lack it entirely.
Because nothing happens automatically. The financing statement stays indexed until somebody files a termination, and the funder has no incentive to do it unsolicited. UCC § 9-513(c) is the mechanism: after you serve an authenticated demand, the secured party has 20 days, and UCC § 9-625 supplies a $500 statutory penalty per failure if it does not comply.
Then the filing is overbroad, and to the extent it exceeds what you authorized it is ineffective under UCC § 9-509 and § 9-510. This is one of the most common defects in MCA filings and one of the more straightforward to demonstrate, because it is a document-to-document comparison.
An unauthorized filing. That is the strongest version of this claim, because there is no authorization to interpret. The entity simply never authenticated anything. It also tends to concentrate a funder's attention, since it is difficult to defend.
Tell us the date on the first call. The demand and escalation can be sequenced against it, and a documented 9-513(c) demand with a statutory penalty behind it can be enough for a lender to proceed on an escrow or a subordination while the termination is finalized.
We search nationally, because under UCC § 9-307 the correct filing office follows the debtor's location and stray filings turn up in unexpected states. Where a matter requires an appearance somewhere Mr. Usher is not admitted, we say so and bring in local counsel. Mr. Usher is admitted in New York, New Jersey and Florida.
Working against a closing date?
Give us the date when you call. Termination demands and escalation can be timed to a real deadline, and a documented 9-513(c) demand carries a statutory penalty if the funder ignores it.