A lien notice has rules. So does a frozen account.
A UCC-1 filing is a public notice that a creditor claims your business assets as collateral, and a frozen account is usually a bank holding funds after a court judgment. Both are mechanisms, not verdicts, and neither one puts your business outside this work. Knowing exactly where you stand inside them is free. Where a court is involved, we say so and route you to independent counsel. Results vary. No outcome is guaranteed.
- A UCC-1 financing statement is a public notice that a creditor claims business assets as collateral.
- A UCC-1 filing is not a lawsuit, not a judgment, and not a seizure of property.
- A UCC 9-406 notification tells the people who owe a business money to pay the funder instead.
- Most frozen business accounts follow a court judgment rather than arriving at random.
- A UCC lien or an entered judgment does not put a business outside what Anchor Resolve does.
- Only a licensed attorney in your state can answer a summons or appear in court for you.
What is a UCC-1, and what does it actually do?
A UCC-1 financing statement is a one-page public notice, filed with a state office, that says a creditor claims your business assets as collateral. It is not a lawsuit, not a judgment, and not a seizure. It is a flag planted in the public record, and three things about it surprise almost every owner.
It was filed the day you signed. Not when trouble started. Most MCA contracts authorize the filing at origination, so the lien has likely existed the whole time, quietly, on every position you hold.
It probably covers everything. The contract nominally purchased your future receivables, but the filing is often a blanket claim: all assets of the business. Equipment, inventory, accounts, the lot.
You can look it up yourself, tonight, free. Every state runs a public UCC index searchable by business name. Knowing exactly who filed what against your company, and in what order, is the single most useful thing you can do before any call, including ours.
What a UCC-1 does in practice: it blocks clean new financing, because every lender searches the index first; it complicates selling the business or its assets; and in construction it quietly caps the work, because sureties read the same index during bonding. What it does not do on its own: take your property. Ownership stays with you. Taking anything requires further legal process. Selling or closing with a filing on record has its own order of operations, covered in what happens to an MCA if you close or sell your business.
When a balance is resolved, the filing does not vanish by itself. A UCC-3 termination has to be filed, by someone, with the same office. For the full mechanics, read our guide to what a UCC lien lets an MCA funder do.
If your account was frozen today, the clock that matters is yours, not ours.
The sooner you know exactly where you stand, the more options typically remain. That is the whole argument for a free conversation now rather than a paid one later.
Why did your funder write to your customers?
This is the moment that brings most owners to this page: a customer, a card processor, or a marketplace calls to say your funder wrote to them, telling them to send your money to the funder instead. It feels like the end of the business. It is not the end. It is a collection mechanism.
The letter is a UCC 9-406 notification. After declaring a default, a funder claiming your receivables can notify the people who owe you money to pay the funder directly. The letters go to whoever the funder can identify: your processor, your marketplaces, a general contractor, sometimes your customers themselves.
What the letter means: the funder has declared a default and is reaching for revenue at the source. That is serious, and it deserves a response this week, not this quarter. What it does not mean: that your business is closed, that you are accused of anything, that the customer relationship is over, or that every dollar is gone. Customers mostly want to know one thing: is this business still standing? A calm call from you, saying you know about the letter and are addressing it, answers that.
One caution, because it matters: whether and how a customer must comply with a proper notice is a legal question with consequences for them. Do not tell customers to ignore it. What to say instead is in our guide to funders contacting your customers, and it is exactly the kind of thing the free consultation walks through.
Education only. Whether a specific customer must comply is a legal question for counsel. Results vary. No outcome is guaranteed.
Why would a business account be frozen with no warning?
In most cases a freeze follows a court judgment. Once a funder holds one, in New York and many states it can serve a restraining notice on your bank, and the bank must hold the funds immediately. No warning is part of the design.
How did a judgment exist before you knew about it? Historically, through a confession of judgment signed at closing. Today, more often through a fast lawsuit filed in a funder-friendly court under the forum clause in your contract. Bloomberg’s 2018 investigation documented owners who learned they had lost a case only when their accounts were already frozen.
Source: Bloomberg, “Sign Here to Lose Everything,” 2018.And default itself is broader than missing payments. Under many MCA agreements one bounced draft, a blocked ACH, or switching bank accounts can each be treated as a default event, triggering acceleration of the full balance plus fees. That breadth is deliberate: it lets the funder reach for its remedies early, while the business still has money to take.
Where you sit in that cascade decides what is still available. Before a judgment, negotiation has the most room. After one, some doors need a licensed attorney to reopen. That is why the first step of any help worth having is establishing, precisely, where you are. The stage-by-stage timeline is in our guide to what actually happens in an MCA default, and the freeze itself in why your account is frozen and how freezes end.
| Term | What it is | What it does to the money |
|---|---|---|
| Freeze | The bank’s hold on your account, usually after a judgment | Holds funds in place; nothing leaves, nothing is taken yet |
| Restraining notice | The post-judgment demand served on the bank that causes the freeze | Requires the bank to hold funds immediately, with no warning to you |
| Levy | The step past a freeze: a legal seizure ordered through the courts | Transfers money from your account to the judgment creditor |
| Garnishment | A post-judgment order aimed at a third party that owes or holds your money | Redirects wages or payments owed to you before you receive them |
General descriptions; the mechanics vary by state. Whether any of these applies to your account is a question for a licensed attorney in your state.
25,000+
Judgments cash advance companies obtained through confessions of judgment in New York courts over roughly four years, worth an estimated $1.5 billion. That reporting drove reform: on August 30, 2019, New York amended CPLR 3218 to bar filing confessions of judgment against debtors who live outside New York. New York-based merchants remain exposed, and funders have shifted to fast lawsuits since.
Sources: Bloomberg, “Sign Here to Lose Everything,” 2018; New York Senate Bill S6395, 2019; Seyfarth Shaw, 2019
What does help actually look like here?
A UCC lien or a judgment does not put your business outside what we do. We work with owners who have liens filed against their receivables and owners with judgments already entered. What changes is the order of operations and who else has to be involved. A lawsuit runs on court deadlines that do not move for negotiations, and only a licensed attorney in your state can file an answer or appear in court, so if you have been served, talk to one now. Anchor Resolve is not a law firm and does not give legal advice. We will tell you that in the first call, and we can still work your positions while a licensed attorney handles what belongs in court.
Map every filing and every position
Once your documents arrive. Free.We pull the UCC record, read every contract, and lay out who filed what, in what order, who has declared default, and who is intercepting revenue. The fog is half the fear.
Sort the negotiable from the legal
Told to you straight, in the same review.Pre-judgment positions are typically negotiable. Entered judgments, active lawsuits, and court deadlines are legal matters, and we say so and point you to independent counsel for those pieces. Nothing is hidden behind a fee.
Negotiate the resolution, lien termination included
Only after you have read and signed your program documents.Lien termination is negotiated as a written term of any resolution, not left as a loose end. Notices to processors and customers are addressed as part of the same written terms. Results vary. No outcome is guaranteed.
Verify the record gets corrected
Checked, not assumed.A resolved balance does not clear the public record by itself: someone must file the UCC-3 termination. We verify the filing actually lands, because the index is what the next lender, and the next surety, reads.
Where we stop, and where a licensed attorney begins.
What we do
- Explain how these mechanisms work.
In plain English, with the statute named where one applies, so the documents stop being frightening and become readable.
- Map your filings and your positions.
Every UCC-1, every contract, every draft, every notice, laid out in order against your real deposits.
- Assemble your documentation.
The statements, the revenue history, and the story of what happened, in the form funders actually review.
- Negotiate written resolutions with funders.
Including lien termination as a term, and verification that the termination is filed.
What needs a licensed attorney in your state
Response windows on court papers are short, and a missed deadline is how default judgments happen. That is legal work, immediately.
Only a court can undo a judgment, and only a licensed attorney can ask it to. We will never imply otherwise.
Exemptions, motions, and hearings are court process. We can explain what they are; we cannot file them.
Including whether a customer must honor a notice, or whether your contract is really a loan. Those are questions for independent counsel.
Nothing on this page is legal advice. Anchor Resolve is not a law firm and does not provide legal representation. If you are facing a lawsuit, an entered judgment, or a court deadline, consider speaking with a licensed attorney in your state promptly. The explanations here describe how these mechanisms generally work; only a licensed attorney can advise on your specific case. The two paths are not enemies: renegotiation work and legal work run side by side in many cases. What we will never do is pretend to be the other one. Our full Disclosures describe the risks of any debt relief program in writing.
Six questions owners ask about liens and freezes.
Does a UCC-1 filing mean the funder owns my equipment?
No. A UCC-1 financing statement is a public claim against your assets as collateral, not a transfer of ownership. You still own and use your equipment. What the filing does is block clean new financing and sales, and give the funder remedies if the debt goes unresolved. Taking anything requires further legal process, not the filing alone.
Do liens or judgments rule a business out of MCA debt relief?
No. A UCC lien or a judgment does not put a business outside what Anchor Resolve does. Anchor Resolve works with owners who have liens filed against their receivables and owners with judgments already entered. What changes is the order of operations and who else has to be involved. A lawsuit runs on court deadlines that do not move for negotiations, and only a licensed attorney in your state can file an answer or appear in court, so if you have been served, talk to one now. The guide to resolving MCA debt after a lien or a judgment covers the order of operations. Results vary. No outcome is guaranteed.
Should I call customers who received a notice from my funder?
Yes, calmly and quickly. Silence scares a customer more than the letter did. The notice is a collection mechanism aimed at your contract with the funder; it does not mean your business is closing or that you did anything criminal. Say you know about it, you are addressing it, and their service continues. How they must handle payment can carry legal consequences for them, so never tell a customer to ignore it.
How does a lien come off the public record once a balance is resolved?
Through a UCC-3 termination statement filed with the same office that holds the UCC-1. A paid or renegotiated balance does not remove the filing by itself: someone has to file the termination. That is why any written resolution should name lien termination as a term, and why we verify the filing actually lands in the index before a matter is closed.
Why was my account frozen without any warning?
Because that is how the mechanism is built. Most freezes follow a court judgment; in New York and many states a judgment lets the funder serve a restraining notice on your bank, which must hold the funds immediately. The lack of warning is the design. It is why what happens before a judgment matters so much, and why an entered judgment is a matter for a licensed attorney in your state.
When does a lien or a freeze need independent counsel instead of Anchor Resolve?
The moment a court is involved. Understanding a filing, mapping every position, and negotiating a written resolution that includes lien termination is work we do. Defending a lawsuit, answering a summons on a deadline, challenging an entered judgment, or unwinding a freeze through the courts is legal work for a licensed attorney in your state. If that is your situation, we say so in the first call.
Guides to the legal weapons, explained as education.
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What Is a UCC Lien and What Can an MCA Funder Do With It?
What the filing covers, what it blocks, and how terminations actually get filed.
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What Is a Confession of Judgment in an MCA Contract?
How a judgment can exist without a trial, and where COJs are still legal.
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Can an MCA Funder Come After Me Personally?
What a guarantee of performance really promises, and how personal assets get reached.
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What Should I Do If an MCA Company Sues My Business?
What the summons means, the deadlines that matter, and every option still on the table.
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Can an MCA Funder Contact My Customers About My Debt?
UCC 9-406 letters explained: what they mean, whether they bind, and how to respond.
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Can You Still Resolve MCA Debt After a Lien or a Judgment?
Why a lien or a judgment does not rule a business out, and what changes when one exists.
If the balance itself is the problem, start with MCA debt relief. If the schedule is the problem, start with restructuring.
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The mechanism has rules. Find out where you stand inside them.
Free consultation. Fees explained in writing before any agreement.
Keeping your business afloat starts with one call.
Not ready to talk? Start with our guide to what a UCC lien lets an MCA funder do.