How To Clear A Lien From A Title With A Charge Off Loan

Understanding Charged-Off Vehicle Liens
What happens when you own a vehicle with a loan lien record appearing on the title, but that loan or lien has been charged off by the bank? How do you remove it from the title? This represents a very common scenario. Frequently, a vehicle loan has long since become delinquent. After typically between 3 to 6 months, the lienholder will execute what’s called a charge off.

The Charge-Off Process Explained
A charge off represents an event where the lienholder must by law declare that loan is no longer a performing asset. It’s no longer a viable valuable benefit on their balance statement. Once they complete that process, they no longer can call it a valuable record for their company. And that means that they may not be able to defend having the lien on their title.

Steps to Remove a Charged-Off Lien
So, what do you do? Well, if you have a vehicle that you borrowed money on, that’s a charge off, or if you’ve purchased a vehicle from somebody and you come to find out that there was a charged off lien on the title, you have to go through a documentation process to get that lien removed from the title record. The DMV will not automatically do this. Matter of fact, they don’t even know that it was charged off. So, you have to present some documents. First of all, you have to contact a lienholder in writing to verify that it’s a charge off. Then what you do is you file those documents.

Filing Documentation for Lien Removal
Either with the DMV or the magistrate in your county to have the lien removed from the title record. It’s called lien mitigation or court order title depending upon the jurisdiction. Our website cartitles.com will give you instructions on how to do this. It’ll show you exactly how we do it. It’s a matter of preparing some forms and documents to be filed with the proper agencies.

Required Documentation Process
You usually have to send out three different packages to three different places. One to the lienholder and they don’t have to respond. You just have to show that you sent it to them. Second, you have to send it to the DMV for a request and then third, you have to usually send it to the magistrate or clerk of court in your county.

Legal Consequences for Improper Lien Filing
What happens if the lienholder does something improper? What you can see on the screen, there are many instances where government agencies have prosecuted lienholders for improper filing. This is from the attorney general’s office in Pennsylvania that sued one title loan company for almost three-quarters of a million dollars. There’s many other cases for millions and millions of dollars in all 50 states where they’re filing these documents improperly.

Final Recommendations
So, stand your ground, do your paperwork properly, get that lien removed from the title so you can either become the legal owner or be able to sell the vehicle to somebody and get your money back.

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