Can an UCC lien take money from your bank account?
Asked by: Turner Romaguera | Last update: January 21, 2026Score: 4.9/5 (29 votes)
A creditor with a UCC lien against your assets could immediately come after things like: Cash from your bank account.
Can an UCC lien affect my personal bank account?
A creditor with a UCC lien against your assets could go after things like cash from your bank account, your car or personal property, and any assets in the UCC-1 filing. States place rules to protect equity of your home, a personal vehicle, retirement funds, and business equipment.
Can an UCC lien freeze my bank account?
Lastly, a Merchant Cash Advance funder may also attempt to freeze or levy your bank accounts and or your payment processors. This is also accomplished by the filing of a UCC Lien and most often attached to the UCC Lien filing is a complete and un-redacted copy of your Merchant Cash Advance Agreement.
How to beat a UCC lien?
Pay the debt in full. This is the best way to stop the filing. Once you pay the debt,the creditor will be required to file a release of lien with the UCC office. Negotiate with the creditor. You may be able to negotiate with the creditor to get the filing removed.
Can the state take money from your bank account?
Bank Levies 101
The IRS and the various state departments of revenue/taxation have vast collection powers. Their most powerful weapon to collect money is a bank levy. A bank levy is an enforced collection, where money is taken out of your bank account.
UCC-1 Financing Statement: What Is it? How Does It Work?
What type of bank account cannot be garnished?
Bank accounts solely for government benefits
Federal law ensures that creditors cannot touch certain federal benefits, such as Social Security funds and veterans' benefits. If you're receiving these benefits, they would be exempt from garnishment.
Can money be taken from my bank account without permission?
Yes, although you may not be aware of it, a bank can take money out of your checking account, even without asking your permission beforehand. It's called a "right to offset," and it's built into the terms and conditions page you sign before opening your account.
How serious is a UCC lien?
It can impact your borrowing power
The most significant impact a UCC filing can have on your business is connected with its very purpose: because a lender already has a lien on all or some of your possible collateral, it will likely be hard– if not impossible– to obtain any kind of secured financing from a lender.
How do I terminate a UCC lien?
Contact Your Lender
Submit a termination demand letter, known as an “authenticated demand.” A UCC termination demand letter is a signed request you send to the lender asking them to cancel the UCC filing. Be sure to list the name and address of the lender, as noted on your financing statement.
Can I sell my house with a UCC lien?
UCC liens rarely jeopardize a deal; however, UCC liens can easily delay the closing of a deal and create further issues in the deal process. Possible issues are cash flow issues (from pushing out the closing date), legal contracts with lenders, possible delays in products or services for customers, etc.
How do I stop a lien on my bank account?
To remove or lift the levy, you must either pay the debt in full or show that the funds in the account are exempt from the levy. Similar to wage garnishment exemptions, certain types of income in bank accounts may be exempt or excepted from levy.
Does the UCC apply to banks?
Article 4, Bank Deposits and Collections
Uniform Commercial Code Article 4 governs bank deposits and collections, providing rules for check processing and automated inter-bank collections.
How long does a UCC lien last?
How long does a UCC filing last? A UCC-1 filing is good for five years. After five years, it is considered lapsed and no longer valid.
Can an UCC lien freeze my personal bank account?
A UCC-1 lien itself doesn't directly give a creditor the authority to freeze your personal bank account. UCC-1 liens are typically filed to perfect a security interest in a debtor's business assets as collateral for a loan.
Can a lawyer put a lien on my bank account?
The short answer to your question is, “Yes.” The most common reason is enforcement of an existing unpaid judgment. Judgment enforcement actions include levies on bank accounts, wage garnishment so and liens against real property.
Does UCC filing hurt your credit?
A UCC filing won't impact your business credit scores directly because it doesn't indicate anything about your ability to repay your debts. However, it can affect your ability to get credit again in the future.
How do you fight an UCC lien?
- Negotiate with the lender: You can negotiate a settlement or restructuring of the debt with the lender to avoid enforcement.
- File a lawsuit: You can file a lawsuit against the lender if there are violations of the UCC or other relevant laws.
How do I block a UCC lien?
- Ask the lender to terminate the lien upon payoff.
- Visit your secretary of state's office.
- Dispute any inaccurate information on your business credit report.
Can you foreclose on a UCC lien?
In all states, foreclosure on personal property assets, including pledged equity interests, may be completed on a non-judicial basis pursuant to Article 9 of the Uniform Commercial Code (this is frequently referred to as a “UCC foreclosure” or an “Article 9 foreclosure”).
How do I clear a UCC lien?
When you pay off a loan, a good rule of thumb is to immediately submit a request with the lender to file a UCC-3 form with your secretary of state. The UCC-3 will terminate the lien on your company's asset (or assets) and remove the UCC-1 filing.
Are UCC liens legal?
A Uniform Commercial Code (UCC) lien is a type of security interest that allows a creditor to seize personal property from a debtor if the debtor fails to pay a debt. It is a legal tool used to secure debt repayment that is governed by state law.
Can an UCC lien garnish wages?
The bank can obtain a judgment against you, which will enable them to attach your personal assets, garnish your wages, etc.
Can a collection agency take money out of your bank account without your permission?
The simple answer is no, debt collectors cannot directly access your bank account without your permission. They don't have the authority to: Withdraw money from your account. Freeze your assets.
Can someone withdraw money from my bank account without my knowledge?
Legally it is not possible to take money from an account without one's permission. Banks can only do that in case of unpaid loans or under suspected fraudulent activity or legal judgments.
What bank account can the IRS not touch?
What Accounts Can the IRS Not Touch? Any bank accounts that are under the taxpayer's name can be levied by the IRS. This includes institutional accounts, corporate and business accounts, and individual accounts. Accounts that are not under the taxpayer's name cannot be used by the IRS in a levy.