13 Jan 24

How to File a UCC Lien as a Creditor: The Complete Guide

| by

Last Updated on: 17th January 2024, 04:51 am


UCC Lien Removal Services: Are They Worth It?

Getting hit with a UCC lien can be scary. These liens can affect your credit score and make it harder to buy a house, finance a car, or even get a job. UCC lien removal services promise they can make the lien go away fast. But are they really worth the money?

What is a UCC Lien?

Let’s start with what a UCC lien actually is. The Uniform Commercial Code (UCC) is a set of state laws about commercial transactions. A UCC financing statement, or lien, gives a creditor security interest in your personal property. This means if you default on a loan, they can seize assets like your car or equipment to pay off the debt.

Many people get UCC liens without realizing it. They’re often buried in the fine print of loan agreements or business contracts. According to a Experian report, over 40 million UCC liens are filed each year.

How UCC Liens Impact You

UCC liens can lower your credit score, especially if the associated debt goes to collections. They also give creditors first dibs on seizing your assets if you default. This makes lenders less likely to approve you for loans or credit cards.

Some employers also check UCC lien records as part of background checks. While a single lien may not disqualify you from a job, it can raise questions. Multiple outstanding liens almost certainly would.

Removing UCC Liens Yourself

You may be tempted to try removing a UCC lien yourself through your state’s Secretary of State UCC filing office. Unfortunately, it’s not that simple. The creditor who filed the lien has to agree to remove it. According to NOLO, here are some options:

  • Pay off the debt
  • Negotiate a lien release
  • Prove the lien is fraudulent
  • Wait for it to lapse after 5 years

As you can see, DIY UCC lien removal is often complicated, time consuming, and uncertain. That’s why lien removal services can seem appealing.

How Lien Removal Services Work

UCC lien removal services use lawyers and paralegals to contest liens on your behalf. According to Avvo, they typically charge $500 to $1500. Here are some of their main strategies:

  • Negotiating payoff settlements
  • Contesting improperly filed liens
  • Helping document fraudulent liens
  • Drafting court orders to nullify liens

In some cases, they may also help you take legal action seeking monetary damages. This can offset the removal costs.

Are Lien Removal Services Effective?

There are lots of UCC lien removal services advertising fast, guaranteed results. But are these claims legit? Here are some key questions to consider:

  • Do they have licensed attorneys on staff? Check reviews and confirm licensing.
  • What specific processes do they use to remove liens?
  • Do they provide any written guarantees or refunds if not successful?
  • Can they share past case examples and results?

Quality can vary widely between companies. According to Avvo, less than half of UCC removal services deliver on their claims. Make sure to do your research before hiring one.

When Are Lien Services Worth It?

UCC lien removal services tend to provide the best value for:

  • Older liens close to expiration: They can speed up removal so you qualify for credit or loans sooner.
  • Fraudulent or improperly filed liens: Their legal resources help get bogus liens dismissed.
  • Liens from defunct lenders: They can track down contacts to negotiate removals for old, unpaid debts.

In less clear-cut cases, you may save money handling UCC lien removal yourself. But if you want to avoid hassles or fast results, lien services can be worth the fees.

Key Takeaways

  • UCC liens negatively impact your credit and assets until removed.
  • Removing them yourself involves paying debts, lengthy legal processes, or waiting for them to expire.
  • Lien removal services promise faster resolutions, but quality varies.
  • Make sure to research companies thoroughly before engaging their services.