August 29, 2017 at 8:59 pm #98183
We are in the process of selling our business and in escrow. There is one outstanding Merchant Loan that we are negotiating with to lower the payoff amount owed. Once agreed how do I let the Escrow company know and have them change the amount we need to payoff at closing. This merchant loan has been handed down from one collection company to another. I want to make sure that we can get the correct amount into escrow and not be liable for the entire amount once agreed. The company we are dealing with right now is not very helpful with and details as to what we are supposed to do. Can I send the letter we receive from the collection company, once we agree on a payoff amount, to the Escrow company and will the use that letter to satisfy the UCC filing?
SueAugust 29, 2017 at 9:10 pm #98759
Thanks for checking out our forum, and for asking your question! It sounds like you have a few options, but I want to say that we don’t give legal advice and you should always consult an attorney in your state, as each state’s rules differ. You certainly can get documentation showing your payment of that debt. In most cases that will satisfy the escrow company, but it must show the name of whomever the debt is owed to. So if the UCC lien is filed by company xyz, and that is who the escrow company thinks you owe, then your proof of payment must include them.
You can also get the UCC lien removed, if you have a few weeks. You can do this by either requesting the merchant lender to remove it once you’ve paid, or you can go down to the state’s secretary of state office and swear an oath that it has been paid. Then have the escrow company re-run their report, now showing no such lien on your business assets.
However, your situation seems to be more based on making sure you don’t pay an amount that the escrow company thinks you owe. This makes me lean towards the first option. I’m assuming some collection agency has made a claim that they’re owed something, which is what is holding up the escrow? If that’s the case then you’ll definitely need something rom the company that made a claim, stating that you’ve paid them in full.
I hope that helps! Please let us know if you have any more questions!