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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Can You Get A Deal On A Car With No Title?

Understanding the Risks of Title-less Vehicle Purchases
Generally, we do not recommend purchasing a vehicle without a title. In fact, you may want to check your state laws to make sure you’re even allowed to do that. There are many risks that can come up if you buy a vehicle without a title. If there’s something about the vehicle history, you can be stuck with the car without a title in the long run.

Current Market Conditions Creating New Opportunities
Nevertheless, we’re seeing some things in the used car market that might indicate that if you could find a vehicle that’s affordable that you can get a great deal on without a title, but you want to be sure you can actually get a title. You want to make sure that it’s not a problem that cannot be solved. You may be able to avoid dealing with a used car market with no deals.

The Vanishing Affordable Car Market
According to this article from Autoblog, inexpensive used cars are vanishing. The used car market is skyrocketing. It’s very difficult to find any used vehicle for any kind of reasonable price and sometimes the only way to do it is to make an exception to some of the normal due diligence.

Strategic Approach to Title-less Vehicle Deals
If you find a vehicle that the seller doesn’t have a title, but the reason they don’t is a solvable problem, you may be able to kind of hack the market and get something that’s a great deal on a nice car. Kind of like if you bought a car that’s a fixer upper, you need to maybe put new tires on it or fix a transmission.

The Fixer-Upper Title Strategy
That’s some method you can use to get a cheap car. You could do the same thing by buying a fixer upper with the title. If you can get that title problem solved, then you can take advantage of the reduced market value that the seller would have to offer because they don’t have a legal title certificate.

Essential Precautions and Documentation
Again, make sure you’re allowed to do that in your state. Make sure that you get good documentation and make sure there’s nothing about that vehicle that could come up later that could prevent you from getting a title. And those are things that are crucial because if you buy a car with no title and then it turns out the car is not eligible for a title, now all your money’s gone. You’re stuck with a piece of metal in your front yard.

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How NOT To Claim An Abandoned Vehicle

Understanding the Abandoned Vehicle Misconception
Frequently in our discussions with clients, the topic or phrase abandoned vehicle comes up during consultation. Often it represents an attempt to discover a method to secure a title for a vehicle that has become challenging. Legally speaking, an abandoned vehicle is one that appears somewhere that nobody knows where it originated from. It just materialized unexpectedly. Whether it’s on private property, public property, on a road, on a highway, in a field, and nobody knows where it originated from. It simply appeared and it wasn’t known where the origin of the vehicle came from.

The Reality of Most Client Situations
In most cases, when clients or customers are speaking to us, that’s not really the case. It’s something where they bought the vehicle and the person never gave him paperwork or somebody gave him the vehicle, never gave him paperwork. The reason why that distinction is very important, if you declare a vehicle to be abandoned, in almost every jurisdiction, you have to surrender the vehicle to the government.

The Harsh Reality: Finders Keepers Doesn’t Apply
The short answer is Finders Keepers does not apply to vehicles. A vehicle that is abandoned has to be processed through a very specific government legal process. And I’m going to show you a couple examples from a couple states of what that is. Now, that’s the bad news. The good news is there are almost certainly much better methods of getting a title.

Critical Advice: Avoid the Abandoned Vehicle Label
If your intention is to get a title for this vehicle, do not call it abandoned. If you call it abandoned, it’s going to make your process either impossible or much, much, much harder. You can’t just make up imaginary storage fees or claim a lean against the vehicle. None of that works. So, forget about abandon. Look at other methods. Even if the rare instance your jurisdiction, your county or state does allow abandoned vehicles, that process is going to be very highly scrutinized and you’re probably going to lose.

Tennessee’s Abandoned Vehicle Regulations
So, let’s look at a couple examples first of what you don’t want to do and then we’ll talk about what you do want to do afterwards. Here’s some state of Tennessee talk about abandoned vehicles. It tells you what the different codes are. You can look up all these codes. It says what the public may or may not do. The public may report vehicles left abandoned, immovable, or unattended to law enforcement. Private property owners, apartment buildings, or you know, if you have a piece of property you own, may call a towing firm and have vehicle removed. That’s it.

What the Public Cannot Do in Tennessee
The public may not, key words, may not have the vehicle towed, sell the vehicle, register the vehicle, obtain ownership of the vehicle. So, if you are the general public, not a property owner, you cannot obtain ownership of the vehicle. That’s key. So, you don’t want to call it abandoned in Tennessee.

Texas Abandoned Vehicle Requirements
What about Texas? Texas says abandoned property, including vehicles. What you have to do is you have to remove it to a storage facility. Basically, you have to call a towing company and they will go through a government process of notifications, of official reporting, of inquiries to the DMV. In many cases, it doesn’t even work for them.

Even Licensed Facilities Struggle
Many of the conversations we have are for towing companies or storage companies that have obtained a vehicle that they towed for somebody that was truly abandoned and they come to find out they can’t get a title either because if you don’t follow every last step in the right order in the right amount of time, you lose. In some cases, you have to start the process within 30 days, but you can’t do too soon. You can’t charge certain fees. You have to do notifications, but first you have to notify the government that you have the vehicle. If you miss one step, the whole process is void.

The Complexity Even for Professionals
So, even for licensed repair and towing facilities, if you fail to follow the exact steps, you’re going to lose on your abandoned vehicle title anyways.

The Better Solution: Title Recovery
So, what can you do? The good news is your situation probably legally defined is not an actual abandoned vehicle. It’s probably what’s called a title recovery, meaning that somehow you obtained the vehicle. The vehicle was given to you or transferred to you or left with you somehow. You know where it came from, which is good. And you just didn’t get a title. You didn’t get the proper documents. You may have a bill of sale, but you’ll probably find out or if you didn’t already, that’s not going to get you a title.

Title Recovery Process Advantages
So, you can go through a title recovery process to have the vehicle be declared you as the owner and then you can get a title, register, sell it, whatever you want to do. But as soon as you start calling it abandoned, now it’s a free-for-all and the government has to step in and say, “We will decide who gets to have the vehicle.”

Your Rights in Title RecoveryIf you are in possession of the vehicle, you have the keys to the vehicle, you have the VIN number, and the vehicle was given to you or left with you, you have the right to do a title recovery attempt. And that title recovery varies from state to state. Our website. You can click the link below. We’ll have a whole section on instructions on exactly how to do a title recovery to get the ownership recognized as you being the owner and get a new title with your name on it.

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How To Title A Vehicle From A House Cleanout (foreclosure, flip, deceased owner)

Understanding Vehicle Title Requirements for Found Vehicles
What do you do if you need to get a title for a vehicle that came from like cleaning out a house like a foreclosure house or a flip house or maybe you were hired by a property owner to clean out somebody’s house that has been deceased and you find a car. Also, this is the same process you would use if you buy a vehicle from a storage facility. Same exact thing.

Why Property Deeds Don’t Transfer Vehicle Ownership
Here’s why this is important. Even if you’ve purchased the house, you bought an old house, you bought an abandoned house or a house that maybe relative sold for somebody who’s deceased. If you bought the house and you have a deed for the house and you’re the owner, that deed and that transfer does not automatically transfer the vehicle to you. It may transfer other contents of the house like if there’s furniture or things in the shed or maybe some yard tools out back. Those normally convey with the house.

Motor Vehicles as Titled Assets
However, motor vehicles are a different type of an asset. They’re considered to be what’s called a titled asset. And so, the title transfer has to be specifically specified on a transfer for it to go along with the house. For example, if the deed to the house also has a valid transfer of a title with it, then it may convey that vehicle. If not, even if the vehicle was owned by the same person that owned the house, even if they’re deceased, it doesn’t automatically transfer.

The Legal Nature of Vehicle Titles
And the reason why is because a vehicle title is a specific legal vesting. meaning that this document, which is a vehicle title, isn’t just a piece of paper. This has the vehicle information, but also the owner information. And until this document is properly signed over on the back, that ownership transfer is not done just with a bill of sale or you bought the house. Has to be done as a separate action.

DMV Requirements and Legal Ownership
So, how do you do it. Well, you obviously you’re not going to have that title. The owner is probably not going to be able to sign it. So, what you do is you have to override because the Department of Motor Vehicles or the titling agency in your state can’t just give you somebody else’s car without proper documents. And you might think, well, all I want is a title. I don’t want Well, you already have the car. I don’t want anything else just a title. Well, just because you have the car in your possession doesn’t mean you own the car.

Possession vs. Legal Ownership
Possession is not ownership of a vehicle. You could have the keys. You could have verbal opinion. You could have a bill of sale. You could have everything. You have the VIN number. But if you don’t have the legal ownership, the DMV cannot transfer it away because in reality, they have a record that somebody else owns it. That person might be deceased. They might be moved. They might be gone. Whatever. But they can’t legally take it out of their name and put it in your name unless they have the proper documents. What’s the proper documents. Well, we looked at it.

Using Existing Titles vs. Court Orders
There you have the title. If you if you have that, you’re good. If you don’t have it, there’s another option. You can get what’s called a declaratory judgment. That is a paper you get from the court in the county where you reside to have you be declared the owner of the vehicle by court order.

How Declaratory Judgments Work
How does that work. Well, you have to sign a petition in an affidavit declaring how you obtain the vehicle, what the facts are, and ask the court to make you the owner. and based on your facts, they’ll probably do it. As long as the vehicle doesn’t come up as stolen, there’s no claims against it. No one’s disputing your story, you’ll get it.

Court Requirements and Process
What’s the catch. Well, the catch is there are no pre-made forms that you can just go into court and say, “Hey, give me this declaratory judgment.” They’re not going to know what you’re talking about. The court does things based on what they’re asked. So, if somebody comes in and ask them something specific, and I mean ask on paper, not just verbally. If you petition the court for a specific thing, they can decide to do it.

Court Petition Examples
You could petition the court to say, “I want my neighbor to wear a black and white polkadotted shirt tomorrow between the 8 hours of 10 and 3.” You can ask them for whatever you want. They can say yes or no, but they don’t have specific forms for everything a person could ask for, right. They also can’t help you make these forms.

Creating the Petition Package
So, what you have to do is you have to put the whole thing together. This is what a spe a particular petition looks like. It’s a package of documents. You put together a petition, an affidavit, a declaration of facts. You put that together and mail it. That’s why you see an envelope here because this is the package we make for our customers. We put it together in a folder. You don’t want to bring it in person to the court. You want to mail it in.

Court Review and Approval Process
And the court’s going to look at it. They’re going to do some research. Make sure everything you said is true. Make sure you’re not some kind of scammer trying to take somebody else’s vehicle. If everything checks out, they give you that judgment of ownership. You file it with the DMV and you get a title.

Application to Various Scenarios
So, if you’ve done a cleanout on a foreclosure house or maybe a deceased owner house or maybe somebody paid you just to fix up a house for a flip and you find a vehicle, that’s the way to get it. Also, if you’ve purchased a storage unit just like you see on Storage Wars or whatever, and you find a vehicle in there, maybe a motorcycle hidden underneath all the piles of junk, you have to do the same thing. The the vehicle doesn’t automatically convey with all the other stuff in the storage unit. You have to go through a separate process. That’s the process.

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How To Remove A Lien From A Title Record – Lien Release

Understanding Vehicle Lien Removal Process
How do you get a lien removed from a vehicle title record? If you have a vehicle that is currently blocked from getting a title because you need to get a lien removed from the official title record, it’s very important to know how to go through that process. First of all, if a lien is on a title record, it doesn’t mean there’s money owed. It doesn’t mean that there’s still a balance owed. It might be owed but also it’s not required. In addition, even if there is money owed, it’s not certain that you can’t get that lien removed.

Examples of Successful Lien Removal
For example, there are many instances where even if there’s money still owed, you can still get the lien removed from the title record. So, you can get the title, you can sell the vehicle, you can process a transfer.

What is a Vehicle Lien?
What is a vehicle lien? A vehicle lien is a claim against a vehicle title for from a bank usually or a lien holder that makes that vehicle collateral for a loan. Now, a lot of people don’t realize this. The lien holder is not the owner of the vehicle. If you finance a vehicle from a bank, the bank is not the owner of that asset. They’re simply a lender or a lien holder.

How Liens Work on Vehicle Titles
What happens is they will place their name on the title to hold their position as a lien holder for collateral and that means the DMV can’t release the title. A vehicle title is a legal document. You’ve seen these before and it has the name of the owner on it as the legal possessor of the vehicle, but if there’s a bank that lent money on it, they’re also going to put their name on it to protect their interest.

The Problem with Paid-Off Loans
Now, if you paid off your loan to the bank, and we’ll talk about if you didn’t pay off the loan here in a minute, but if you did pay off the loan, what they’re supposed to do is sign the title, stamp it paid, mail it to you, and they’re also supposed to remove that record from the DMV database. However, most of the time, they don’t do that second part. They just sign the title, stamp it, and mail it to you. And if you lose it, now you have a problem because that record is still going to be in the database.

The Correct Way to Contact Lien Holders
If that’s the case, you want to contact a lien holder to have them remove it. However, it’s very important how you do this. You can’t do it by phone. You can’t do it by text message, fax, online, internet. You have to do it in writing. And we’ll talk here in a minute why. We have hundreds of clients over and over that contact us and say, “Look, I tried to call the bank. I called the lien holder and they said they couldn’t do it or they said they would do it and they never did.” That’s cuz you did it by phone. If you do it in writing, you’ll get your lien release.

Getting Lien Release When Money is Still Owed
Now, let’s talk about if the money is still owed. Maybe you stopped paying on a car a long time ago. Maybe it’s a charge off. Maybe it’s a write off. Maybe it’s what’s called a short sale. And you can get information on that below. How do you get the lien release? Same way. You do it in writing. What you do, and this is how we do it. You put together a package of documents that is an official lien release.

The Lien Release Package
The package. It’s a lien release, a letter of non-interest, an affidavit of facts, declaration of interest. You put that together in writing, printed, and you send it to the lien holder with a request for them to verify it.

Why Written Requests Are Essential
And it’s important to do it in writing because here’s why. Lien holders don’t have a dedicated lien release department. So if you call them up and say, “Hey, give me a lien release,” somebody’s got to figure out whose job it is to do that. And these are all people that do something else all day that they have a responsibility to get done. So if they drop what they’re doing to put together this package of paperwork, right, it might take them an hour or two to put all this together. It’s not their job. So they’re not going to do it. They either are going to tell you they won’t do it or they won’t do it. You probably are familiar with this because you probably got the runaround from the bank.

Making It Easy for the Lien Holder
But if you put that package together and send it to them, now it’s a different story. All they have to do is sign it and mail it to you. In fact, we put, you can see in this package, there’s envelopes in here. We even give the lien holder an envelope already written out to mail it back to you. In addition, put a stamp on the envelope. Why should you do that? Well, any work that that person at the bank has to do is one more reason they’re not going to do it. If they can’t find a stamp, they’re going to throw it away. If they don’t have an envelope, they’re going to just drop it. You got to do all the work for them. Even if there’s money owed, even if there’s not money owed, this is the way to do it. Getting a lien release to get your title cleared is extremely important.

Backup Option: Court Order Title
Now, if for some reason the bank doesn’t respond or they take their time or they just, you know, forget about it, then you have a backup option in that package that I held up here a minute ago. We also put together a magistrate title or a court order title or declaratory judgment depend on the jurisdiction. It’s a backup. So after a week or two, if the bank hasn’t responded, you can then take the package, bring it to your local court or mail it to your local court and they can sign it because the bank didn’t respond. The court order title is an override of that. It’s an override of the bank not performing what they’re supposed to do.

Summary of the Lien Removal Process
So that’s the process of getting a lien removed from a title record. If you have been instructed by your bank to go to a website to get the lien release and it’s not going to the right place or they tell you to call a title company, this is why. Because they don’t have people in their bank that’s trying to help you out because it cost them too much money.

Why Banks Don’t Clear Title Records Automatically
And you might even ask, why is it that they don’t clear from the title record when they sent you your title initially? Well, it’s money. For them to do that, somebody has to fill out some forms. That might take a half an hour, 45 minutes. Somebody has to get those forms to the DMV and pay the fee. It might cost them $100, $120 for all the cost of taking a lien off of a record. Think about that. For hundreds of thousands of cars, that’s millions of dollars they save by not clearing the lien record. And it puts the burden on you. But this is a way to get that done easily.

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