Get A Charge Off Title Lien Released

So if you have a vehicle that has a lien recorded against the title with the DMV, you cannot do a title transfer until you get that lien released from the title record. So how do you do that? What if it’s a charge-off? What if it’s a write-off? That’s going to be one of the most common scenarios for a vehicle lien to be recorded in an official title record. If that lien or underlying payment has not been paid for a long period of time, the lender has probably placed it into non-performance or delinquency status, and it becomes a charge-off or write-off.

Lender’s Perspective on Charge-Offs
What that means is the lender does not consider it to be an asset on their balance sheet any longer. It means that the loan can no longer be counted on as a securitized instrument for the lien holder. So what happens is they do a charge-off; they do a write-off, but they don’t go out of their way to remove the lien from the title record. And the reason why they don’t is because it costs them money to actually do a lien release. So why bother doing it if it’s not going to benefit them?

Requesting a Lien Release
So how do you get that lien removed? What you want to do is you want to request it from the lien holder. However, it’s very important how you go about doing this, and we’ll talk about the method and also talk about a backup if, for some reason, you request it and they don’t do it, or they drag their feet, or they give you a runaround. What can you do to get a lien release without relying on the lien holder, without relying on the lender?

Step-by-Step Process
Step one is to contact the lender in a very specific way. You want to do it in writing; you don’t want to do it by phone, email, text message, Facebook, or any electronic means because lien holders do not have a specific lien release department. There’s not people sitting around waiting to sign a lien release. Everybody at the bank, financial institution, dealership, wherever the lien is held, has some other job they’re doing every day, and for them to drop everything and do a lien release is not going to be beneficial to them.

Mailing the Lien Release Document
So what do they do? You call them up, and you say, “I need a lien release,” and they tell you that they’re not going to do it, or they can’t do it, or they can’t talk to you because you’re not the borrower, or they tell you they will do it, but then they never follow through. So what you do is you take the actual lien release document. You can see one here on the screen. This is a lien release; this happens to be from the state of Nevada. Every state has a specific official government lien release form. Nevada is one of the simpler ones. You get this form, and you fill it in 100%. The Vehicle Identification Number, year, make, model—you see all the spaces on the screen—registered owner, printed name of lien holder, address, phone number of the lien holder, and you print it and mail it to the lien holder.

Importance of Physical Mailing
Don’t try to fax it, email it, any other way. If you do that, it won’t work. Whether it’s a charge-off, write-off, or even if it’s paid off, you don’t want to do it electronically. Here’s why: that lien holder is going to get that email, and now they have to print it, they have to find an envelope, they have to do everything that is work in their daily routine. If you already have it printed with a little arrow sticker where to sign and put a return envelope in that mailing so all they have to do is sign it and send it back to you, you don’t want them dragging down to the mailroom to find a stamp, to get an envelope—you don’t want to give any excuse to throw it in the trash.

Including a Letter of Non-Interest
In addition to this lien release document, also include what’s called a letter of non-interest. Sometimes, if that lien holder employee that pulls it up—because that’s who’s going to get it, just an administrative employee—they look it up and they say, “It’s a charge-off.” Well, they might not know that that means lien release, but what they do know is if you have a letter of non-interest that means, “I have no longer any interest in this vehicle,” signed lien holder. They can sign that because a charge-off means they don’t have an interest in the vehicle. So include a backup with your mailing that says “letter of non-interest.” Have that form also prepared, printed, filled in. Don’t leave anything for work for them to do when you send it. Again, put a return envelope with your name already printed on the front, a stamp on it, so all they have to do is sign it, put it in, and mail it to you.

Multiple Submission Locations
The only time that lien holders we see do not send you a lien release is if it’s an active loan on a later model vehicle with a lot of money owed. If you have, you know, right now it’s October of 2023, if you have a 2022 vehicle that’s owed $50,000 on it, you’re probably not going to get a lien release. As long as the vehicle is older, even if it has a lot of money on it, if the lien is delinquent, charge-off, write-off, many times the lien holder just signs it. In addition, the way we do it is we send it to multiple locations for that lien holder because all you need is one of them. If you just send it to one place, that person might throw it in the trash. If you send it to four or five places—we send it to up to five—all it takes is one of them, some secretary, clerk, administrative person signs it, mails it back to you. It increases the probability you’re going to get that lien release.

Consequences of Not Obtaining Lien Release
Because if you don’t get that lien release, you’re in big trouble because you have to either forget about the car or you have to go to plan B. What is Plan B? Well, here’s Plan B. Plan B is you have to do a court order title, and here’s an example. This happens to be from a county in Ohio. It’s a court order certificate of title. You have to fill out an affidavit, a journal entry, a docket request, an affidavit of facts, a petition, also be typed up and submitted to the court.

Court Order Process
Now, if there’s a lien on it, they’re going to ask you, “Did you try to contact the lien holder?” So you can show you already did this. You don’t want to start with the court order title if there’s a lien on it. If you know there’s a lien, at least go out of your way to try to have documentation, not that you called or emailed, but you actually mailed something to the lien holder. If you can have proof of that, now the court is going to be on your side because they say, “Well, the bank doesn’t want anything to do with it. They didn’t, you know, send any reply back.” So the court will then step in. Use this as a backup method. It’s very powerful because if you don’t get the lien release from the lien holder, the court can override that with the DMV. Use these as methods you can use to get that lien off the title record.

DMV Regulations
The DMV can’t do it without having one of these two forms: either the lien release from the bank or the court order from the court. Without one of those two things, the hands are tied of the DMV. They’re not allowed to remove a lien just based on some receipt you show you paid for it or your verbal statement. They can’t do that. They have to go by what the law says. It seems like they’re giving you the runaround, but in reality, they are following their own rules.

Timing and Court Order Submission
So try to get the lien release. Maybe wait, you know, 7 to 10 days. If you don’t get it back, then start your court order process. And the court order process is not that bad. It’s some documents you have to fill out. The one thing about court is they’re very picky about the documents, making sure everything’s i’s are dotted, t’s are crossed, everything’s done the right way. If anything is off, they’ll just reject it. So you want to make sure it’s done right. And we also recommend don’t bring it to the court directly, mail it to the court. If you bring it directly, the clerk might look at this and say, “Well, you know, we don’t know what to do with this.” Sometimes clerks don’t know exactly what’s going on behind the scenes, and if you bring it in, they could turn you away. If you mail it, there’s nobody there for them to argue with, right? They just file it with the court and let the judge or the magistrate deal with it.

Court as an Ally
If you’re there, they can kind of try to deflect things. You know, most courts are overloaded, so they are told unofficially to not do as many cases as possible. Nothing wrong with the courts, not doing anything wrong, they’re just trying to keep junk cases from showing up. But court-ordered title cases are actually good for the court because they’re administrative. It’s not like a big Law and Order Jack McCoy kind of thing where you have to go in and do a big case. It’s all administrative. It’s all done with paperwork. So those cases the courts are comfortable with, but the clerk may not know that. So don’t leave it to chance by walking in the door and saying, “Here’s what I got.” Remember, the court can also not help you with any of the paperwork.

Legal Advice Limitation
How do we know that? Well, they tell you. Look right here. They say the court’s office is not permitted to give legal advice, distribute forms, or assist in the completion of any form submitted to the court. So they tell you right there, and that’s pretty much across the board. Every state has that. They can’t assist in the completions of the documents. You have to have them all done when you walk in the door. You can’t come in empty-handed.

Final Advice
So try your lien release, or if it’s a clear title, try your prior owner contact. If those fail, keep your documentation that you tried, and then let the court be on your side. This is one example where the court is your friend. They’re not against you. They’re not trying to harm you. They’re not trying to jam you up. The court is trying to help you deal with the bureaucracy of the DMV. And if you can get them on your side, there’s no more powerful ally in the world than the court, and you want to have that tool in your toolbox. Because the DMV, you know, as much as they want to help, it’s a bureaucracy. It’s a punchline of jokes on sitcoms, and you don’t want to be subject to that if you don’t have to.

Additional Resources
You also have the option in some states of doing a bonded title. That’s a subject for other videos. Make sure you subscribe to our channel. Go through our whole library. We have an extensive video library with videos about many, many subjects of getting a title, instructions for some of these processes, and if you want more information, you can check out our website cartitles.com or book a consultation with a certified title agent.

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