Disagreement with a UCC filing is not the same as helplessness. The Uniform Commercial Code provides a structured set of remedies for debtors who believe a filing is invalid, unauthorized, or no longer reflects a live obligation. The challenge is that these remedies require initiative. The system does not self-correct. A filing stays on the record until someone acts to remove it, and the burden of initiating that action falls on the debtor.
Challenge the Authorization
A UCC-1 financing statement can be filed only by a person who holds a security agreement authenticated by the debtor. That is the rule under Section 9-509. If no security agreement was ever signed, or if the agreement that was signed does not support the scope of the filing, the filing lacks authorization. This is the most direct ground for challenge, and it is the one that carries the clearest statutory remedy.
Challenging authorization begins with assembling the documentary record. Pull the filing from the secretary of state’s database. Compare it against every agreement you signed with the named secured party. If no agreement exists, the filing is unauthorized as a matter of law. If an agreement exists but describes narrower collateral than the filing claims, the filing exceeds its authorization and can be challenged on that basis.
The practical difficulty is that some MCA funders include UCC filing authorization buried in the terms of a revenue purchase agreement. The debtor may not recall signing it. The agreement may have been presented electronically with minimal review time. But if the authorization is there, however obscurely placed, the filing has a legal basis, and the challenge must shift to other grounds.
Attack the Debtor Name
Article 9 requires that the financing statement provide the correct legal name of the debtor. Under Section 9-503, the name on the filing must match the debtor’s name as it appears on the organizational documents filed with the state, or for individuals, as it appears on the debtor’s driver’s license. An error in the debtor’s name can render the filing “seriously misleading” under Section 9-506, which means it is ineffective as a perfected security interest.
This is a technical defense, but a powerful one. Courts have invalidated filings over missing corporate suffixes, misspelled names, and incorrect entity designations. In In re Borden, a bankruptcy court held that a filing against “Borden” when the debtor’s legal name was “Borden, Inc.” was seriously misleading and failed to perfect the security interest. The secured party lost its priority position because of a missing three letters.
If the filing against your business contains a name error, that error may be the fastest path to rendering the filing legally ineffective.
Use the Formal Demand and Accounting Request
Section 9-210 provides a mechanism called a Request for Accounting. The debtor sends an authenticated request to the secured party asking for a statement of the aggregate unpaid amount of the secured obligation, an identification of the collateral, and an approval or correction of a list of collateral. The secured party must respond within 14 days.
The accounting request serves two purposes. First, it forces the secured party to state, on the record, what it claims the debtor owes and what collateral it claims. If the secured party’s response is inconsistent with the terms of the original agreement, or if the response reveals that the obligation has been satisfied, the debtor has evidence to support a termination demand. Second, if the secured party fails to respond, the debtor can use that failure to support a claim for damages under Section 9-625.
The accounting request is an underused tool. It shifts the burden of explanation to the creditor and creates a documentary record that can be used in court.
File a Correction Statement and Pursue Statutory Damages
When the secured party refuses to terminate the filing, the debtor has two concurrent options. The first is a correction statement under Section 9-518, which places a notice on the public record that the debtor disputes the filing. The second is a claim for statutory damages under Section 9-625, which imposes a minimum recovery of five hundred dollars for each instance of noncompliance, plus actual damages if provable.
These remedies work together. The correction statement alerts third parties to the dispute, potentially mitigating ongoing commercial harm. The damages claim provides an economic incentive for the secured party to cooperate. Some secured parties who ignore demand letters respond when they learn that their refusal to terminate exposes them to liability that exceeds the value of the original transaction.
And here is where the strategy becomes layered. The debtor files the correction statement, sends the statutory demand for termination, documents the 20-day waiting period, and then initiates the damages action. Each step builds on the last. Each step creates a record that makes the debtor’s position stronger in court.
Litigate the Underlying Obligation
Sometimes the dispute is not about the filing itself but about the debt it secures. If the underlying transaction was unconscionable, if the MCA agreement was a disguised loan that violates usury statutes, or if the funder breached the terms of the agreement, the debtor may have grounds to void the obligation entirely. And if the obligation is void, the security interest that depends on it falls with it.
This is the most aggressive strategy and the most resource-intensive. It requires litigation on the merits of the underlying transaction, not just the mechanics of the filing. But for debtors who believe the entire deal was fraudulent or unenforceable, it is the strategy that addresses the root cause rather than the symptom.
A 2024 ruling in New York addressed an MCA agreement that a court recharacterized as a criminally usurious loan. The court voided the agreement, and the funder’s UCC filing, which depended on a valid security interest arising from that agreement, lost its foundation. The debtor obtained a court order directing termination of the filing.
Each of these strategies carries different costs, timelines, and probabilities of success. The right approach depends on the specific facts: whether the filing is authorized, whether the debtor name is correct, whether the obligation is disputed, and how much commercial harm the filing is causing. A consultation with an attorney who handles UCC disputes is where the analysis begins. That first call carries no obligation and no fee.
