Lenders can use UCC liens to strong-arm borrowers who struggle to make payments on their merchant cash advances (MCAs). This can be overwhelming and stressful for business owners.
Are you among the business owners facing a UCC lien? What must you do in the face of aggressive collection tactics?
How a lender can threaten you with a UCC lien
The UCC lien has already established a security interest in your business assets, giving the lender priority over other creditors and allowing them to negotiate a settlement or payment plan with you. If you cannot reach an agreement, the lender can seize and sell your assets through foreclosure or repossession.
However, the lender may want to collect payments as quickly as possible, which may lead them to use aggressive tactics to get what they want. These tactics can include:
- Coercion: Using the UCC lien to force you to pay under threat of asset seizure
- Intimidation: Frightening you into making payments by using intimidating threats to take drastic actions if you don’t comply
- Aggression: Pursuing collection with excessive zeal, such as making harassing phone calls or filing multiple lawsuits
- Bullying: Using the UCC lien to make you accept unfavorable settlement terms, taking advantage of your vulnerability
Thus, it is essential to take prompt action after receiving a collection threat regarding the UCC lien on your business. By acting quickly, you can help prevent further damage to your financial situation and explore resolution options to minimize harm to your business.
Protecting your rights as you develop a plan to move forward
Facing aggressive collection tactics due to a UCC lien can have long-lasting consequences for your business. By seeking legal guidance, you may better manage your complex and challenging situation. In addition, having legal counsel may help you understand and protect your rights as you develop a plan to move forward.