A UCC lien is the filing of a UCC-1 document with your state, and there are three ways to remove UCC lien filings:
- the secured party files a termination;
- the lien lapses after five years; or
- you force a termination.
For blanket versus specific liens, read What Is a UCC Lien & Can I Remove It? The Secretary of State stays out of the dispute, because UCC 9-520(a) does not permit the filing office to decide whether the lien has been paid.
How Do You Get a UCC Lien Removed after Paying It Off?
If you send a signed demand (the term used in 13 Pa.C.S. § 9513(c)), and nothing is owed or committed, UCC 9-513(c)(1) requires the secured party to file a termination statement or send it to you within 20 days.
Paying off the balance does not start the clock, because UCC 9-513(a) only applies to consumer goods. Most merchant cash advance contracts are written as the purchase of your accounts receivable, and UCC 9-513(c)(2) sets a different trigger for sold accounts. Read What Is a UCC-1 & How Do I Get It Removed? for how to send the demand.
If the deadline passes, UCC 9-509(d)(2) lets you file the termination yourself on a UCC-3 indicating that you, the debtor, authorized it. The filing fee in Pennsylvania is $84, and in New York it is $20 electronically or $40 on paper. Under UCC 9-625, you are entitled to $500 in statutory damages if the funder fails to file the termination, plus actual damages such as the inability to obtain other financing or paying more for it.
Does a funder have to remove the UCC lien if you settle for less?
Usually, yes, if the agreement states that the balance of the debt is released, because UCC 9-513(c)(1) applies when no obligation is secured by the filing. But the funder can argue the filing is still effective if a missed installment revives the entire balance. When negotiating the settlement, make sure you have:
- a deadline for filing the UCC-3, measured from receipt of the settlement payment;
- every UCC-1 file number and the states where each was filed;
- a clause binding any assignee, because UCC 9-513(c) requires that the secured party cause the secured party of record to file;
- your authority to file the UCC-3 yourself if they miss the deadline; and
- a copy of the UCC-3 once filed.
Also check whether the funder has assigned the account to a third party. Under UCC 9-510(b), a record authorized by one secured party of record does not affect the filing as to another secured party of record. As part of a January 2025 settlement in New York, Yellowstone Capital agreed to terminate certain liens filed on the property of small businesses and cancelled a total of $534,552,724 in debt.
Do UCC Liens Expire after Five Years?
Yes. Under UCC 9-515(a), the UCC-1 is effective for five years from the date that it was filed unless a continuation statement was filed within the six months before the expiration date. A continuation statement filed before the six-month window is ineffective under UCC 9-510(c). A UCC-1 filed on March 15, 2021, lapsed on March 15, 2026, unless a continuation statement was filed between September 15, 2025, and March 15, 2026.
Three limits apply. First, once a filing lapses, perfection no longer exists, but you will still owe the debt. Second, you cannot terminate a lapsed filing; the filing office must reject it under UCC 9-516(b)(3)(B)(ii). Third, Wyoming filings made on or after July 1, 2013, last 10 years under Wyo. Stat. § 34.1-9-515(a).
What can you do about an improperly filed UCC lien?
UCC 9-510(a) provides that a filed record is effective only to the extent the filing was made by a person entitled to file it under UCC 9-509. So a UCC lien filed by someone not entitled to file it, or that exceeds the security agreement, is ineffective in law. Signing an MCA agreement with a security agreement authorizes a filing on the collateral it describes, so most bad filings name the wrong entity or you personally, list more assets than you pledged, or were never authorized.
For a UCC lien that was not authorized at all, UCC 9-513(c)(4) allows the debtor to demand that the secured party file a termination statement within twenty days. Delivery to the address on the UCC-1 counts, even for a party you have never dealt with. The Official Comment to UCC 9-513 treats that as an address the secured party held out for notices under UCC 1-202(e). If the secured party fails to file, you may do so yourself under UCC 9-509(d)(2). You are entitled to statutory damages of $500 for an unauthorized filing under UCC 9-625(e)(3), and another $500 if the secured party fails to terminate under UCC 9-625(e)(4). A court may also order or restrain collection under UCC 9-625(a).
How to remove UCC lien filings in each scenario
| Situation | Means of removal | When it must be done | Cost in PA if you file |
|---|
| Paid off | Signed demand; if not done, UCC-3 filing by funder or you | 20 days after demand | $84 if you file UCC-3 |
| Settled for less | Termination clause in settlement; then signed demand | As set in settlement | $84 if you file UCC-3 |
| Five years have passed | None needed; lien will lapse | 5 years from date of filing, unless continued | None |
| Never authorized | UCC 9-513(c)(4) demand; if not done, UCC-3 filing by you | 20 days after demand | $84 if you file UCC-3 |
Afterward, a UCC search confirms it worked. A search in PA costs $12 for each name searched. For more, see How do I check if there is a UCC lien on my business?
Frequently Asked Questions
If the UCC lien has been terminated, why does it still show up in searches?
UCC 9-519(g) allows the name of the debtor to remain in the index until one year after the original lapse date of the filing.
Can I file a UCC-5 information statement to get a bad UCC lien removed?
You may file a UCC-5 stating that the UCC lien is inaccurate or wrongfully filed, but under UCC 9-518(e) it has no effect other than to put a searcher on notice.
My original funder sold my account to someone else. Who needs to file the termination?
The termination must be filed by the current secured party of record, because UCC 9-513(c) requires that the secured party cause the secured party of record to file the termination.
Can the funder renew the lien whenever it wants?
No. The UCC lien can only be renewed by filing a continuation statement within the six months before the five-year lapse date. Any other time is ineffective under UCC 9-510(c).