I defaulted on a merchant cash advance after sales slowed down, and now I received a UCC lien notice. They are calling a lot and making it sound like they can take everything from the business immediately. I am in Michigan and I am trying to understand what the UCC filing actually means. Is this the same as a judgment, and what should I do next?
A UCC filing is not the same thing as a court judgment. It is a public claim against the collateral described in the agreement, often business receivables, accounts, equipment, or general business assets. It can block new financing and create pressure with banks or processors, but it does not automatically mean the funder can seize anything it wants that day. Pull the actual UCC filing and compare it to the collateral language in your MCA contract. Also check whether there is a personal guarantee, confession of judgment, or pending lawsuit. If the funder is threatening seizure or contacting third parties, preserve every message and get legal advice before promising payment or moving assets.