What Is a UCC Filing & How Does a UCC Lien Work?

Cody Cromwell
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When a UCC Filing Occurs

UCC filing occurs when state or state appointed officials hold a generic security interest in the fees, commissions and/or any other payables owed by a debtor to the debtor's creditors. UCC filing is also known as "charge of unsecured claim".

A filing of a UCC lien typically requires the filing debtor (the person who owes the money, generally the purchaser) to certify in writing that the money earned from the sale of goods or services that the debtor performs will be used to pay back all of the debt owed to the creditor (the person who lent the money, generally the seller).

The debt owed to the creditor by the debtor who filed the UCC filing usually consists of unpaid charges, unpaid fees (such as commissions and trade service fees), and unpaid liabilities to the creditor, such as taxes and returns.

These amounts include the amounts due to the creditor from the sale of the debtor's goods and services and the debt owed to the creditor by the debtor who is referred to as the "debtor in default".

The debtor in default that files the UCC filing is the person who holds the assignment of accounts and earnings and losses from the debtor in default. This debtor in default is usually the person (known as the assignee) who had a repossession of the debtor's accounts and earnings and losses.

How a UCC Lien Works

When you place a UCC lien on someone’s property, it becomes property of the lien holder so long as the lien remains in place. As soon as the lienholder pays off the lien, they also own the property as well as any improvements on that property with any other improvements related to the property being subject to the same UCC filing.

A UCC lien is filed with the clerk of the court, and the lienholder has the right to go before a magistrate or a judge for a court order to satisfy the lien. The lien is effective once the court order is granted and the lienholder will then take possession of the property.

The lienholder can then file a UCC suit if the lienholder doesn’t obtain any satisfaction from within 15 days of the original payment made on the property or in the event that the property is foreclosed. If paid within that timeframe, the lienholder has no right to file a UCC suit for pre judgment interest.

Common Types of UCC Liens

There’s a lot of talk around bankruptcy filings, debtors, and creditors. You may have heard of a UCC filing, the Uniform Commercial Code, or UCC. You’ve probably even heard of a UCC Filing which is sometimes referred to as a UCC lien. But what’s the difference? Where do they come from, and what are they used for? Here are some of the most common types of UCC liens.


A creditor may file a redemption lien. By filing a redemption lien, a creditor may pay a debt for an amount lower than the total debt owed. This amount is called the redemption figure. While the debtor is then relieved of having to pay the remaining balance on the debt, the creditor is still entitled to their interest in the property.

Secured Party

A secured party also files a lien, usually a pawn lien. While the pawn lien gives the secured party first dibs on the property, they also have a lien on it. This means that if the debtor does not pay their debt to the secured party, the secured party is authorized to take possession of the asset. A secured party may also file a cap lien on a debt that is owed to them by a debtor.

General Lien

UCC Liens Against Specific Collateral

A UCC lien is a type of security interest or charge against one or more items of collateral. Most often used for real estate, UCC liens can also be used on many other types of collateral – including inventory, accounts receivable and machinery. In fact, the UCC is used on most types of business and commercial transactions that require filing documents with a government office.

A UCC lien is secured by a lien on the collateral. A lien is a right possessed by one party to claim certain assets as owed by another party. In the case of a UCC security interest, the collateral is protected by the security interest and the lien holder owns the UCC security interest.

UCC liens are filed with the County Recorder of Deeds, as well as the Clerk of the Court of Common Pleas where the collateral is located. There is also a UCC office in Boston that specifically handles filings. In many cases, a UCC lien is recorded before the loan is funded, requiring the lien holder to file with the court prior to the filing of the financing document.

As the lien holder will have the grantee’s signature made party to the UCC lien, the lien holder is responsible for noticing and sending proof of each debt to the relevant parties before a financing document is filed.

UCC Blanket Liens

Are used when a person is sued by a lender, a collection or a creditor. The lender loans the money to the borrower when the business engages in a business transaction. The borrower uses the money for his business or personal needs (usually a business purpose). So the money is owed by the borrower to the lender. If the borrower defaults on the loan or does not repay the money, the lender and or the creditor files a UCC complaint against the borrower with California courts.

A UCC complaint is a lawsuit brought against someone by a creditor. It is similar to a civil lawsuit. If the creditor wins the lawsuit a judgment is entered against the borrower for the money owed. This judgment is entered by a court, and is enforceable.

How to Check a UCC Lien

When you register a vehicle in your name, you will have to file a UCC Lien on your personal property. Since the lien is considered a claim on your vehicle, it will be reported by your insurance company and will include on the title.

If you’re moving to a new location, you’ll have to transfer the lien to your new address. This means visiting your local department of motor vehicles and taking out the insurance card in your name and giving the card to your new insurance company. When your insurance company receives the card from DMV, they will transfer the lien to your address.

On your insurance card, you will need to place a lien release sticker. Take the card to DMV, place it on the back of your vehicle and sign the lien release sticker on your insurance certificate. The lien will be released at that time.

It's also possible to check your UCC lien online. This can be helpful if you're not sure if your car is safe at your previous move.

If you need to file an UCC lien as a lienholder, you can use the status checker provided by the Colorado UCC system. You can also search for an individual lien by using the reference number on your lien release certificate. This may provide you with useful meeting information.

Review Your UCC-1 Financing Statement

Did you know that your copy of the UCC financing statement is actually a copy of the UCC 1 security agreement…the original of which is filed with the UCC system? It’s true, and you’re probably wondering why your copy of the financing statement shows it’s for use before the vehicle is delivered to its new owner when it’s really a durable security cover. A document filed with the UCC system is unique, kind of like a fake ID. And just like a fake ID, if you present a copy of one that’s not genuine, you’ll get busted!

Only those who need one to secure his or her interest in a vehicle needs to secure financing under the Uniform Commercial Code (UCC). The owner of the vehicle takes a lien on that vehicle by filing one (the UCC lien) when the lien is properly recorded. So the filing doesn’t provide the owner with power over the vehicle, but it does secure the interest of the person filing it.

State-by-State Searchable UCC Lien Database

The Uniform Commercial Code (UCC) is a bank of standardized commercial transaction documents (documents) that replaced and supplanted the common law bank-credit relationship. It includes specific Documents set up for such uses as buying and selling goods, getting credit extended by a bank, drawing checks by a bank, etc. It is designed to cover a wide variety of business arrangements and transactions.

This UCC Lien Database displays many documents related to liens of various types and help facilitate the quick and easy analysis of lien types of commercial transactions.

Please Note: All the California laws are in effect until they are changed, deleted, retired, or superseded by newer statutes.

How a UCC Filing Can Impact a Business

Uniform Commercial Code (UCC) filings are important paperwork for all business entities. A properly completed UCC filing and lien limit injury, theft, fire or water damage to business assets from lawsuits, civil claims or construction or events such as flooding and hurricanes.

UCC laws make it easier for lenders to collect against business owners in the event of default on a loan contract. Once filed, a UCC lien certificate can be used in collection proceedings and it makes it easier for the holder of the lien to collect via foreclosure.

All UCC filings and UCC liens require the filing of a UCC lien certificate with the Secretary of State’s office in your state. A UCC lien might include a statement that the filing is not dispositive. This means it does not prevent the opposing party to the UCC filing from contesting its validity.

However, if the filing is a good faith filing required by UCC law within the last four years, it becomes effective to raise the liens priority. Thus, if the lien is recorded with the Secretary of State’s office before the opposing party has the ability to contest the filing it will become effective even if the filing is not dispositive.

UCC Liens Could Prevent Additional Borrowing

Who is liable for the debts of a UCC filed company? If the bank or lender files a UCC lien against your personal assets—leasehold improvements, vehicles, firearms, and more—then you could be outlawed from taking out any additional loans and lines of credit.

Getting a UCC lien filed against your personal assets is not a common practice, but it’s become more common in the past five years as the lending industry is changing. One reason for the changes is lawsuits filed by borrowers who have found themselves stuck with unpaid debts. When they can’t pay the loans they obtained from lending institutions, they file lawsuits to recover the money. In response, the lending institutions typically try to cover their assets by filing UCC liens.

UCC Liens Could Impact a Business Credit Report

It can happen to anyone, but if it’s too late, it can’t be fixed. That’s the unfortunate scenario for those who have had their bank accounts overdrawn in the past by a business. Because overdrawing a bank account can be a major red flag on your credit information, you need to find a way to protect yourself from future problems. UCC financing filings may be able to take care of this need for protection.

A UCC filing is another way to record a security interest in the payment or return of a debt. Its purpose is to track a security interest, ensure it’s perfected, and preserve the priority of that security interest.

There are many forms that come with the UCC filing fees that need filed, but the most common one you’ll need is the UCC security agreement. These are used when you’re taking a secured debt as collateral against a loan. They are also commonly used for retaking a loan that has gone bad or when you’re repaying a bad debt.

Business Owners Risk Losing Pledged Assets

UCC, Uniform Commercial Code, is a federal law that governs commercial transactions and specifically addresses issues related to secured transactions. One of the major benefits of UCC services is the ability to obtain a pledge or lien in the form of a UCC filing and that the transaction will be automatically perfected.

Filing a UCC Lien is part of the Uniform Commercial Code (…). The beginning of a decentralized electronic filing system provided the first opportunity to file a lien electronically. Fortunately, the requirement to file a lien in a tangible form of a certified copy of the lien document is not entirely eliminated but is made easier with a UCC filing and the lien attached to the electronic filing. We will update this topic with more information on this topic shortly.

Other than filing a lien, UCC parol evidence rule does not require that the parties be parties to the same contract. When parties sign a contract but do not complete all the tasks outlined in the contract, the contract can be completed by a subcontractor or agent. The terms of a completed contract can be enforced even if the parties to a contract do not agree. This means that each party has the option of taking steps to enforce or block the claims of the other party.

How to Remove a UCC Filing Lien

A financing statement is a statement filed with the UCC, stating that the person listed as the lienholder is claiming a security interest in certain property. These filings are not automatically followed by a notice to the debtor and are not legally enforceable by the lienholder unless filed in the lender’s state of residence.

Lenders may file financing statements in order to place a lien on various properties relating to a debtor’s debt, including real estate, vehicles, inventory, as well as any other personal property. If an entity files a financing statement, then the other party with the debtor, called the collateral party, will have 30 days to perfect a lien against the identified collateral.

To perfect a lien, the collateral party must serve the financing statement on the debtor and file a financing statement with the state where it is located. If the lienholder does not perfect a lien against the collateral within 30 days, the collateral party is free to dispose of the collateral.

The financing statement can be cancelled in the following manner:

Borrower files bankruptcy or debtor otherwise files with the court a UCC plan of reorganization, which releases all liens, financing statements, and other security interests from the borrower’s obligation

Lender Files a UCC-3

A lot of banks finance car and truck purchases in most states. People who borrow money from a creditor to finance a car purchase must meet a host of requirements in order to receive a loan. Most of these loan requirements are common to all types of personal loans. However, because a car or truck loan is a loan secured by a person’s own property – their vehicle – the creditor’s requirements are specialized. One of the lender’s requirements is a UCC filing that provides information on the vehicle’s value and ownership.

A UCC-3 financing statement is a 5-piece form that must be filed with the appropriate state agency. Although the UCC-3 financing statement form is most commonly used, it is possible for the owner of a financed vehicle to complete another UCC filing, depending on the circumstances. Either UCC statement is a standardized format that functions as an official record of the financed vehicle’s ownership and documentation of a secured loan.

Swear an Oath of Full Payment

And File a UCC Lien If you are an active party in a lawsuit, you may want to swear a UCC filing. If there is a judgment entered against you, you may wish to make the judgment permanent by filing a notice of a lien against property owned by the judgment debtor.

We’ll cover both variants.

UCC Lien Frequently Asked Questions (FAQs)

A ‑Lien’ on a property (such as a house or car) means that the lienholder owns the property until the debt is repaid. So if you don’t follow this process, you may lose the house or the car you have as collateral.

The Uniform Commercial Code (UCC) is a set of state laws that govern business transactions. The UCC also requires every business to file a ‘Lien’ on a piece of collateral if it has a security interest in it. So you’ll have to file an unpaid/asserted lien in order to make the lender claim sole ownership of the property and hold on to it until you pay your debt in full.

Are UCC filings in the public record?

Getting a mortgage for a home, car, boat, or off the property in real property you owe money on is a major decision. People in your life often ask you questions, as do the professionals you come into contact with. These professionals may even require you to sign documents for them. Filing the Uniform Commercial Code (UCC) is one of those documents that you may one day need to sign.

However, what do you know about the UCC? What does it do? Is it important? If not, then why file it? And what do you need to know before you do?

The UCC is comprised of a collection of uniform laws that are designed to govern transactions involving goods that go in and out of a state, or a person who deals in these goods. These goods can include cars, consumer goods, and many others.

One of the many important pieces of the UCC is Article 9: Liens. This article governs liens in a way that acknowledges the realities regarding liens and how they affect the current and future value of a loan or other transaction. In other words, it is designed to be flexible enough to accommodate the circulation of goods.

A lien allows a lender to assert priority over the property when it comes to collecting the debt. If you do not pay your loan, the lender can come after the property to collect the debt. Other lenders with filed liens can then do the same.

Where do you file a UCC?

The Uniform Commercial Code (UCC) has standardized much of commercial law, setting forth the rules of contracts, bills of sale, and sales. UCC filing works well for owners of things like cars, boats, land, or houses.

The UCC filing process is very straightforward. It’s generally a good idea to file anything that’s going to be used in the marketplace, but if you don’t know if you’re going to use something, it’s a safe bet to file.

A lot of financial institutions, filing systems and businesses use the UCC filing. Therefore, there are many businesses that can assist you in filing a UCC.

How do I find my UCC filings?

To find your UCC filings, you will probably need to contact your financial institution or attorney to get a copy. Most financial institutions have a form or online option for you to request a copy of the filing and the filing details. If you don’t have contact with the bank or attorney who filed the UCC, it may be difficult to find the filing details online or on the papers.

You can also search for your name and the exact document you filed (i.e. UCC filing or UCC lien) for free on the Bureau of Finance's website. If you are unable to locate a UCC filing or UCC lien on the Bureau of Finance's website, you may contact your bank, attorney, or financial institution to learn about the status of your UCC filing.

Can you file a UCC-1 without a security agreement?

You can file a UCC-1 filing without a security agreement. However, it’s important to note that if you file a UCC-1 without a security agreement, you will not be able to collect on the lien in any event. Likewise, a user’s title holder may in certain circumstances prefer not to file a UCC-1 without a security agreement, but there are lot more scenarios where one might want to file a UCC-1 without a security agreement

One of the reasons why lots of people file a UCC-1 with a security agreement is because there is a statute of limitations on collecting on a UCC filing due to the fact that the UCC filing does not place a lien on the property.

By adding a lien on the property, the statute of limitations is much shorter, and you can collect on the lien and document the filing information far easier. So if you read the law, or your state has a statute of limitations, filing a UCC-1 without a security agreement will be restricted to the type of transactions we look at in our state rules.

If you are thinking of filing a UCC-1 without a security agreement, be sure to consult with an attorney.

What happens when a UCC filing expires?

The Uniform Commercial Code (UCC) has been an important part of the business world since the 1970s. It is backed up by a national statutory law that provides uniform rules and procedures for doing business across the United States.

The first step in creating a surety bond or surety certificate is the issuance of a UCC filing. When a UCC filing is issued, a UCC security agreement is attached to the underlying business transaction that is securing an obligation that is being filed. This provides evidence of the business transaction between the debtor’s creditor with the promise to file a UCC Filing with the appropriate state agency.

The application for a UCC filing generally requires the following types of information:

The debtor and creditor, and other names by which they are known in business. However, this is not required for a filing that is being filed for private companies.

The value of the underlying obligation being secured.

The name of the creditor, as well as the amount of the debt.

The obligation that requires the filing.

The information required is often put in writing in the security agreement. This information generally includes the following information:

The principal place of business of each of the debtors.

The city and state of business of each of the debtors, as well as the address, phone number, and name of an officer.

Bottom Line

What Is a UCC Filing?

A Bill of Sale is a document that provides certain rights to the purchaser of goods or property from the seller. The agreement generally covers a specific set of rights and obligations, and both parties must agree to the terms. For example, a Bill of Sale may authorize the purchaser to sell or encumber the goods, and indicate who is responsible for residual defects. In addition, it may state that the seller remains liable for a failure to perform and compensate the purchaser for any consequential damages.

One of the items considered to be included in the Bill of Sale is a Register of Title, which will be held by the seller as evidence of ownership. The register of title also includes a description of the kind of the property, the registration number, the name of the person to whom the title is deemed to be transferred and the date of transfer. In addition, the register of title won’t be available for sale or private transfer and the terms and conditions governing the usage of the register of title are subject to the Registry Rules.