A lien is a form of security instrument that secures payment of a debt.
A lien holder (lienholder) is the lending institution that financed the car for that individual. The lien holder is the legal owner of the property and holds the title to it. If you fall behind on the car payments, the lien holder can repossess your car.
However, there are certain steps you can take to either reclaim your vehicle or pay off the debt.
Discharging a Lien Liens are discharged after a certain length of time. The requirements for commencing their discharge vary among the states. If a person pays and satisfies a lien, she should be careful to obtain a written, legally sufficient release or satisfaction, and file or record it in the appropriate government office, so that her title and credit reports no longer show the encumbrance.
Remove the Lien Holder from Your Car Title You can remove a lien holder from your vehicle title once your car loan has been paid in full. This is an administrative process involving you, the lien holder and the Department of Motor Vehicles in your state. Without removing the lien holder, you cannot sell or transfer ownership of the car in any way.
Disclaimer Legal Information Is Not Legal Advice This site provides information about the law designed to help users safely cope with their own legal needs. But legal information is not the same as legal advice -- the application of law to an individual's specific circumstances. Although we go to great lengths to make sure our information is accurate and useful, we recommend you consult a lawyer if you want professional assurance that our information, and your interpretation of it, is appropriate to your particular situation.
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