Imagine running your business smoothly, only to discover that someone filed a UCC lien against your assets without your knowledge. This scenario is more common than you might think, and understanding why it happens can help you stay vigilant. Here are a few reasons why this might happen:
Lack of notification
While lenders should notify you when they file a UCC lien, you might overlook or lose this notification in the mail. Additionally, you might not receive the notice if the lender does not have your current contact information.
Public records
UCC liens appear in public records but do not always reach the debtor directly. You must check the records with the Secretary of State’s office to discover the lien.
Overlooked during financing
While securing financing, the focus is often on obtaining the funds rather than the details of the lien filing. You can easily overlook a UCC-1 statement in the loan agreement.
Unauthorized filings
In some cases, unauthorized parties can file a UCC-1 claim against your business without your knowledge due to clerical errors or fraudulent activities.
Regular monitoring
To avoid surprises, regularly monitor your business credit reports and check with the Secretary of State’s office for any filings against your business. This proactive approach can help you stay informed about liens affecting your assets.
If you suspect someone filed a UCC lien against your assets fraudulently or without your knowledge, contact the Secretary of State’s office in your state or consult with a legal professional to verify and address the situation.