What Is A Lien On A Car?

What Is A Lien On A Car?

If you have been approved for financing to purchase a vehicle, then you need to get familiar with the term “lien.” A lien is essentially a safeguard for the lender of the vehicle. This represents the lender’s legal right to possession of the car until all debt is repaid.

When the buyer of the vehicle fails to make payments, the lienholder then has the right to repossess the vehicle. The lender can also insist that the asset is protected, making full insurance payments the buyer’s sole responsibility. Once the financing is completely paid off, the lien is released.

If you are searching online for “what is a lien on a car,” then this post should help!

Buying A Car With A Lien

Purchasing a car from a dealership will offer the easiest lien process possible. Of course, a new vehicle will never come with a lien since you are the first owner. At a used car dealership, though, the dealer will generally take care of all paperwork needed to draw up a lien. Purchases from private sellers will be much different when it comes to liens, so make sure you know the status of any possible liens before finalizing a purchase. If any car still has a lien on it, the seller will need to make some sort of arrangements to pay off any remaining debts before transferring the title.

There are a few ways for the buyer to check on a lien of a particular vehicle. For example, you can simply ask the seller for a copy of the lien release document. Or, you can use state DMV resources that are always available to the general public. Some state online resources will let you run a vehicle check by using the VIN (vehicle identification number) from that specific model. Other resources such as CarFax can also reveal any existing liens.

Selling A Car With A Lien

There are several options for selling a car with a lien on it. Perhaps you should plan ahead and begin paying off the balance as early as possible. Paying more regularly or as one lump sum payment are always options. You may save a lot in interest by paying off the financing quickly. Once the lien is released, then you are free to transfer the vehicle to a new buyer.

A trade in at the dealership is another way to deal with letting go of a car with a lien. Oftentimes, the seller will trade in the vehicle and sort out any remaining lien arrangements at the same time. Make sure the trade-in price will cover your full payoff amount, though. If it doesn’t cover the full amount, then a dealer may roll the outstanding balance into your new car’s financing plan.

Selling a car privately means all paperwork will be your sole responsibility. After paying off the vehicle and receiving the updated title, you will have to sign the title release and take care of the transfer. Some states may require your signature to be notarized when selling the car. Make sure to check out all of your state’s rules and regulations before selling privately.

Dar Liens Offers Lien Processing and Filing in Arizona

Dar Liens Offers Processing and Filing of the following types of Liens: Pre-Liens, Notices to OwnerMedical Liens, Construction Liens, Mechanics Liens, HOA Liens, 20 Day Preliminary Lien Notices, and more.

More Articles About Liens

Read More
How To Put A Lien On A House

How To Put A Lien On A House

When an individual owes you money and you do not receive a payment, there are several courses of action you can take. Sending letters demanding payment or hiring a collection agency can work, but if the efforts prove unsuccessful you can always file a lawsuit against the debtor. You can then use a court judgement to attach a real estate lien to the debtor’s home. After the lien is set, the debtor cannot refinance their property without paying off the owed debt first.

5 Steps To Put A Lien On A House

Here are the five necessary steps one must take to put a lien on a house:

1. Check For Statute Of Limitations

Statute of limitations for debt collections will vary by state, so make sure to contact an attorney to learn about your state’s laws. Every state will have specific guidelines for how much time you have to sue another individual for an owed debt. Type of debt owed is another factor that can alter the timeframe of this action, regardless of the state. Knowing the statute of limitations is generally the first step in this legal process.

2. File A Claim In Court

Filing the lawsuit against a debtor in the proper court is essential. Not all courts in each state will have the power to grant specific requests. If you are seeking a small amount of money, then it is recommended that you file in small claims court. Make sure you file in the small claims court that is in the county where the property is located.

3. Serve Court Papers

Serving court summons to the debtor is the proper way to notify someone of an impending lawsuit. You must notify the individual and give him/her time to respond and appear at a hearing, with the chance to present a defense in the case. Not properly serving the court papers and giving the individual a chance to respond could dramatically change the case. The debtor could then have grounds to request the court overturn a ruling in your favor. A debtor can be notified in-person and by certified or registered mail.

4. Attend Court Hearing

Be sure to bring any proof that you have in this case to the court hearing. Proof could include something such as a signed contract by both parties, agreeing to an amount that will be paid. If the debtor does not appear in court or the judge rules in your favor, the court will then grant you a judgement for the debt amount owed. The next step is to request an Abstract of Judgement which is a certified copy that proves the judgement is legitimate.

5. Record Lien

One of the last steps to take is recording the Abstract of Judgement against the property of the debtor. Again, this process will vary by state. Some states may require that you register the document with the Secretary of State’s office or the county’s land records office. This will create the lien against the property. Always be aware of any expiration dates to know how long a judgement lien can last in your state.

Dar Liens Offers Lien Processing and Filing in Arizona

Dar Liens Offers Processing and Filing of the following types of Liens: Pre-Liens, Notices to OwnerMedical Liens, Construction Liens, Mechanics Liens, HOA Liens, 20 Day Preliminary Lien Notices, and more.

More Articles About Liens

Read More
loading