Selling a Car with a Lien
When putting lien on a car, consider the regulations and laws that exist in your state. A lien holder can be an individual or an organization to which the applicant owes money. The title of the car will be held by the holder until the debt is paid in full. When placing a lien on a car, notify the titleholder. A lienholder is the financial institution or individual that holds the rights to the title of the vehicle. While you may or may not maintain possession of a title with a lien, the lienholder's signature will be required to transfer ownership once all debts have been paid. Reasons you may have a lien on your vehicle include.
If you have a lien on your vehicle, you can still sell it, but the process will be more complicated. A lienholder is the financial institution or individual that holds the rights to the title of the vehicle. While you may or may not maintain possession of a title with a lien, the lienholder's signature will be required to transfer ownership once all debts have been paid. The pay-off amount is the amount of money that will need to be paid to the financing company or other party to receive the title for the vehicle.
This amount includes interest and other fees incurred up until the date your debit is satisfied, which could make the total slightly higher than your current balance. Once you've determined what the dollar amount is, you'll have a couple different options for how to sell a vehicle with a lien:. In either case, the vehicle will be what is a trans boy to sell if you owe LESS than its current worth. If you owe more than the vehicle is worth, you'll have a hard time selling unless you're willing to pay the difference.
For more information, please refer to our page on Selling vs. Trading In a Car. The easier option of the two is selling your vehicle with a lien to the dealership where you intend to purchase your new car. Once you give the dealer a power of attorney, the dealer will contact the lender directly and handle all financial arrangements.
Please note that you are NOT trading in your car, because you don't actually own it. You must satisfy your loan first, and that's what selling it to the dealer will do. The dealer will pay the existing balance and give you a check for any amount over how to make a fake copyright negotiated sale price.
You may also choose to have this amount applied toward the purchase of a new car. Before the transaction is complete and you leave your car to the dealership, make sure you receive documentation that your lien has been satisfied. Though more effort will be required on your part, selling a car with a lien privately could net you a higher profit. Since an escrow service will usually benefit both parties and make fraud attempts less likely, the fee for escrow services can often be split between the seller and buyer to reduce costs on either end.
Reasons you may have a lien on your vehicle include: The vehicle is financed and hasn't yet been paid off. Unpaid repairs. The vehicle was used in another transaction as collateral. Selling Options for Vehicles with Liens Once you've decided to sell your vehicle, you'll need to determine the pay-off amount.
Once you've determined what the dollar amount is, you'll have a couple different options for how to sell a vehicle with a lien: Sell to the dealer. Sell the vehicle privately. This process is more how to find drafts on wordpress, but the negotiated sale price is often higher. Selling to a Dealer The easier option of the two is selling your vehicle with a lien to the dealership where you intend to purchase your new car.
Selling to a Private Party Though more effort will be required on your part, selling a car with a lien privately could net you a higher profit. Here are a few things you'll need to consider to make the process easier: Include the details of the lien in your listing.
You'll list an advertisement for your car just as you would any other vehicle, with the addition of the lien information that buyers will need so as to avoid confusion. Sell in the location of the lienholder, if possible. If the bank or financial institution holding the lien is located in the area you're trying to sell, this will make the transaction much easier.
Once you make an agreement with the buyer, you can go directly to the lender to pay off the existing lien. Ownership can then be transferred in person from the financial institution to the buyer. Consider an escrow service. If the financial institution isn't in your area, an escrow service can help to ensure a secure transaction.
An escrow service will assume responsibility for receiving payments from the buyer and will hold the title until the purchase is complete. Advantages of an escrow service include: Payoff serviceswhich will do most of the work with the financing institution for you.
Title transfer serviceswhich can help to ensure a safe and legitimate transaction and provide the necessary paperwork once the sale is complete. On This Page.
Selling to a Dealer
Dec 18, · Your auto loan lender is usually the lien holder on your car and may hold the car title. Depending on the state, the lien holder will file the lien with your state’s transportation agency or department of motor vehicles. Jul 20, · Car Liens If a lender has a lien on a car, it has the legal right to repossess the vehicle if the borrower defaults on the loan. Depending on your state, the lender may also hold the car title. After the loan has been repaid, the lender will release the lien and the title will update — but we’ll dive deeper into that process later. Obtain a title application. Fill out your personal information, vehicle information and lien holder information (address and lien code). If you don't have a lien code, call the lending institution's customer service and ask for the lien code.
Last Updated: June 15, References Approved. This article was written by Jennifer Mueller, JD. Jennifer Mueller is an in-house legal expert at wikiHow. Jennifer reviews, fact-checks, and evaluates wikiHow's legal content to ensure thoroughness and accuracy.
There are 37 references cited in this article, which can be found at the bottom of the page. This article has been viewed , times. A lien gives you a right in or over property as security for a debt someone owes you  X Research source While there are several different types of liens, as an individual you probably are filing either a mechanic's lien or a judgement lien.
Mechanic's liens enable contractors to collect money they earned doing work by encumbering the property they worked on until the debt is satisfied. A judgment lien allows you to secure the collection of a court-awarded judgment at the completion of a lawsuit.
To file a mechanics lien, notify the debtor several weeks beforehand that you plan to file a lien if you aren't paid. Check with your local clerk of court's office to find out if your state has a specific form for this. Next, draw up the Claim of Lien according to your state's format requirements, then file the paperwork with either the property recorder's office or the clerk of court within 60 days of notifying the debtor.
To learn about filing a judgement lien, read on! Did this summary help you? Yes No. Log in Social login does not work in incognito and private browsers. Please log in with your username or email to continue.
Method 1 of Exhaust all other options. Filing a lien is a public declaration that someone hasn't paid for contract work, and is a strong legal move to make. Before you jump straight to the decision that you want to file a lien, talk to the property owner and attempt to set up another plan. Be clear from the beginning of a job that you'll file a lien if debts remain unpaid. Some states such as Washington have forms you can use to notify property owners of your right to file a lien if you aren't paid.
If the property owner agrees to a payment plan, make sure it has a reasonable due date and get the plan in writing. You may want to hire a lawyer at this point to help you draw up an agreement. You also might consider using alternative dispute resolution. With ADR, you and your client share the cost of hiring a neutral mediator who helps you work out a mutually agreeable outcome. The process often is less adversarial, more efficient and less expensive than filing a lien. Hiring a debt collection agency is another way to avoid the time and expense of engaging in formal legal processes by filing a mechanic's lien.
Debt collections agencies specialize in recovering debts and can put the pressure on your client without you having to take legal action.
If you decide to go this route, research and find a collection agency that has a good reputation and specializes in working with people who do the same kind of work you do. Make sure you've given preliminary notice. Most states require you to notify the debtor that you will file a lien if he doesn't pay you. Typically you would give this notice within the first few weeks of work, before payment even becomes a problem.
If you fail to give preliminary notice, you may lose your right to file a lien if your client doesn't pay. Check with your local clerk of court's office to find out if your state has any specific requirements. In most states, preliminary notice must be given within 10 to 20 days of the date you began work.
Check your state's deadlines for filing a lien. You only have a brief period of time after you've completed the work to file for a lien, and in some states this period is as short as 60 days. For example, in Louisiana you only have 60 days from the day you finish the work to file a lien for non-payment. This doesn't give you much time to pursue alternative methods of collection. However, in neighboring Mississippi, you have a whole year from the date the debt became due. That gives you plenty of time to explore other payment options with your client.
Research the property. To file a lien on property, you must conduct a title search on the property to ensure your client owns it and get the full legal description from the deed. This process could cost several hundred dollars to complete. Draw up your lien. A lien typically is a one-page document with information about the creditor, the debtor, and the property. Most states have specific court forms to fill out. For example, California requires a Claim of Lien form as well as a notice and an affidavit.
Check the formatting requirements of the county where you're filing the lien, because many counties have strict rules governing the paper size, margins, and font of the text.
If you don't follow these rules, the office will reject your lien. For example, if you're placing a lien on real property, most states require a legal property description such as the one on the deed, not just a street address. File your lien. Your lien must be filed with either the property recorder's office or the clerk of court. Each state designates a specific office to accept filings of mechanic's liens, so make sure you've got the right office.
If you're claiming a lien on real property, it must be filed in the recorder's office of the county where the property is located. Many offices have a backlog on mailed filings, so this is particularly important if you're filing close to the deadline. Additionally, filing in person means if there's something wrong with your lien you can find that out and correct it immediately.
Notify all necessary parties. In most states you must notify the property owner immediately after you file the lien. Some states require additional parties, such as other lien holders, to be notified as well. You can find out who must be notified when you file the lien. Enforce your lien. If the debtor still doesn't pay after you've filed the lien, you must enforce the lien by filing a foreclosure lawsuit within a certain amount of time, usually a year.
The proceeds of the sale are used to satisfy any liens on the property. After the enforcement period runs out your lien is expired and has no value. Some states have extremely short enforcement periods. For example, in California you have just 90 days to file a lawsuit after filing your lien. Method 2 of Understand whether you're eligible to file a judgment lien. You can only file a judgment lien after you've won a court judgment in a case in civil court.
The judgment lien allows you to sell the real or personal property subject to the lien and use that money to satisfy the debt owed to you. The lien attaches to the debtor's real or personal property, informing potential buyers that the title of the property is not clear. If you place a judgment lien on someone's property, there's a chance you won't receive your money until that person decides to sell that property. Learn the rules for judgment liens in your state.
Different states have different procedures for getting judgment liens and for maintaining them. If you aren't familiar with those rules you could cause your lien to expire. Generally, you can only place a lien on personal property located in the state where the judgment was obtained. The lien is only good for a certain period of time.
For example, in states such as California and Arizona, your lien is good for five years, but may be renewed if you haven't been paid within that time.
Draft the relevant documents. If you're eligible to file a judgment lien, find out what documents you need to file, where you need to file them, and what fees will be charged.
Some states have a form you can fill out. For example, if you want to file a lien in California on personal property such as a car or a boat, you would fill out a "Notice of Judgment Lien, Form JL-1" and file it with the California secretary of state. You can get a certified copy for a fee from the clerk's office in the court where you were awarded the judgment.
File your documents. Where you file your documents depends on where the property is located and whether you're attaching your lien to real or personal property.