UCC Lien Lawyer for MCA Liens in New York
A UCC-1 financing statement is a public filing that announces a funder's claimed security interest in business assets. It is not a judgment, and filing one does not by itself take anything. It sits on the public record until a termination statement is filed, which a debtor can demand in writing once nothing is owed.
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What a UCC-1 filing actually is
A merchant cash advance agreement commonly authorises the funder to file a UCC-1 financing statement. The filing goes on a public record maintained by the New York Department of State, and it announces that the funder claims a security interest in business assets — often described broadly enough to read as everything the business owns.
The filing is notice. It is not a court order, it is not a judgment, and it is not itself a seizure. What it does is make the claim visible to anyone who searches the record, which is why it tends to surface at the worst moment: when the business applies for credit, takes on a new processor, or tries to sell.
Why the lien outlives the advance
A financing statement does not expire because the money was repaid. It stays on the record until something is filed to end it. The instrument for that is a termination statement, and UCC § 9-513 sets out when one is owed.
For business collateral, § 9-513(c) is the operative subsection: within 20 days after a secured party receives a signed demand from the debtor, it must send the debtor a termination statement or file one, where there is no obligation secured by the collateral and no commitment to give value. The demand is a step somebody has to take. Nothing happens automatically.
Filings that were never authorised
UCC § 9-509 allows a person to file an initial financing statement only where the debtor authorised it in a signed record, or where a security agreement does. With stacked advances it is worth checking each filing against what was actually signed: whether a particular funder had authority is a question about documents, not about which name appears on the record.
When the funder does not act
UCC § 9-625 is the article's remedies section. Where a secured party is not proceeding in accordance with Article 9, a court may order or restrain collection, enforcement or disposition of collateral on appropriate terms, and the section provides for damages in the circumstances it defines.
What that is worth in a particular matter depends on the filing, the agreement behind it and what was demanded, which is the part that has to be read rather than assumed.
What a lien question is not
A UCC filing sits alongside the other things an MCA funder may be doing, and they run on separate tracks. A lawsuit is answered, a judgment is challenged in its own proceeding, and a restrained account is dealt with on the clock the bank is working to. Clearing a filing does not resolve any of those, and none of them clears the filing.
Sources
- UCC § 9-513, Termination Statement (New York State Senate)
- UCC § 9-509, Persons Entitled to File a Record (New York State Senate)
- UCC § 9-625, Remedies for Secured Party's Failure to Comply with Article (New York State Senate)
- Uniform Commercial Code filings (New York Department of State)
Every case turns on its own agreement, facts and procedural posture. Nothing on this site is legal advice or a prediction of any outcome.
Start here
What arrived?
Three different problems, three different clocks. Start by working out which one you are holding.
- 01A clock is running
A summons and complaint
A lawsuit has been filed against the business, and usually against whoever signed the personal guaranty.
You have a limited period to respond. How long depends on how you were served and which court the case is in, so the papers themselves are the only reliable answer.
Do this first
Write down the date you were handed them, then find the court and index number on the first page.
- 02Already standing
A judgment already entered
A judgment exists in a case you never appeared in — usually a default, or a confession of judgment signed when the advance was taken.
A different problem with a different remedy. A judgment is challenged in its own proceeding rather than defended as a lawsuit, and it keeps its force while that happens.
Do this first
Get the county and index number, then pull the filed papers and read them against your payment history.
- 03Same day
A bank account frozen
Your bank is holding funds against a judgment, usually under a restraining notice served by the creditor's attorney.
The freeze and the judgment behind it are handled on separate tracks, and payroll and rent do not pause for either. This is the one to move on today.
Do this first
Ask the bank for the judgment creditor's name, the county and the index number, in writing. Do not move money between accounts.
Not sure which of these you have? Call 646-396-8050 and read us what the first page says, or send us the details.
Our firm
Who handles the case
Migir Ilganayev, Esq. founded Ilganayev Law Firm, PLLC in 2017, the same year he was admitted in New York. He is also admitted in New Jersey and Florida.
- Practising since
- 2017
- Admitted in
- New York, New Jersey and Florida
- Law school
- New York Law School
- Appears in
- State and federal courts
- B.A., Political Science and Philosophy of Law, Brooklyn College, City University of New York, 2012
- J.D., New York Law School, 2015
- Judicial intern to the Hon. Martin M. Solomon, Kings County Supreme Court
- Public Service Certificate for pro bono service
How it works
How your case moves
This is the shape of a defended merchant cash advance lawsuit. A judgment already entered, or an account already frozen, runs on its own track alongside it.
Every case turns on its own agreement, facts and procedural posture. Nothing on this site is legal advice or a prediction of any outcome.
FAQ
Questions people ask at this stage
Does a UCC lien mean the funder can take my equipment?
Not on its own. A financing statement is notice of a claimed security interest, not permission to seize anything. What a funder may actually do turns on the agreement it says created the interest, and on whether it has a judgment. Those are separate questions from the filing itself.
A funder with a judgment has enforcement routes that do not depend on the UCC filing at all, which is why a lien and a judgment are worth separating before deciding what to deal with first.
How is a UCC lien removed once the advance is paid off?
By a termination statement. Under UCC 9-513(c), once there is no obligation secured and no commitment to give value, a secured party that receives a signed demand from the debtor has 20 days to send a termination statement or file one. The demand is the step businesses usually miss.
The filing office record is what later lenders and buyers search, so a lien that was satisfied but never terminated keeps showing up until the termination is actually filed.
Can a funder file a UCC lien without my agreement?
It is not supposed to. UCC 9-509 lets a person file an initial financing statement only where the debtor authorised it in a signed record, or where a security agreement authorises it. Whether a particular filing was authorised depends on what was signed, which is worth reading before assuming either way.
What happens if the funder ignores a demand to terminate?
The statute contemplates a remedy rather than a stalemate. Under UCC 9-625, where a secured party is not proceeding in accordance with the article, a court may order or restrain collection, enforcement or disposition of collateral, and the section also provides for damages in defined circumstances.
Free consultation
Book a consultation
Pick a time that suits you, then a few short questions about what arrived and when. It takes about two minutes, and the consultation is free.
- The call is with Migir Ilganayev directly, not an intake desk.
- He asks what arrived and when.
- He reads the agreement and the payment history against each other.
- He tells you where you stand and what the options are.
- The consultation is free. Fees for representation are discussed on the call and depend on the matter.
- No obligation. Sending it does not create an attorney-client relationship.
- If it is urgent, calling is faster than writing.
- 139 Fulton Street, Suite 801, New York.
Prefer to speak now? Call 646-396-8050, or see the office address and email.
Ready to put this in front of the attorney?
Book a consultationBring the filing, and the agreement behind it.
A UCC search result and the agreement that authorised it answer different questions. The first conversation is about what was filed, by whom, and whether anything is still owed.
Free consultation