How to Remove a Lien?
01: Consider your options for removing a lien on property.
Since most liens are based on some monetary amount, the simple way to remove a lien is to pay that specific amount. There are other ways to remove a lien, depending on how the lien originated.
- Sell the property. In some cases, you may be able to find a buyer for the property. However, selling property with a lien can be complicated. The lender who placed the lien will still have a security interest in the property, even if it is sold. The buyer must be informed that there is a lien on the property.
- Return the property to the lien holder. A lien can’t be placed on property that you own. If you simply give the property to the lien holder, the lien is void. Say, for example, that you own a truck. There is a lien on the truck based on the outstanding truck loan balance. If you give the truck to your lender, the lien on the truck goes away.
- If you feel that the lien was obtained based on fraud, duress or some other unlawful means, you can obtain a court order to have the lien removed. This option is expensive and time-consuming. You’ll need to hire an attorney to help you with the court filing.
02: Remove a lien on your car.
The lien against your car is based on the remaining loan balance. When your lender places the lien, it noted on the car title and your insurance policy. This notation is made so that any future buyer of your car is aware of the lien.
- A car lien is paid off with the final monthly car payment.
- After you have paid off your car loan, request a letter from the lender that states you have fulfilled your obligation. Take the letter to your local Department of Motor Vehicles (DMV). The DMV will issue you a new title that lists you as the sole owner of the vehicle.
- After you receive your new car title, contact your insurance company to have the lien holder removed from your policy. Keep copies of the letter releasing you from the lien and your new car title.
03: Go over the details to remove a lien from your home or other property
You can pay off a property lien by paying the remaining loan balance. If you negotiated a different repayment amount, you can remove the lien by paying that amount in full.
- You will need to pay or resolve any lien related to a divorce settlement, child support payments, or any other creditors.
- Request a release-of-lien form from your lender. The lender signs this form as evidence that the lien should be removed. You can get this required form from your lender, your attorney of your local government.
- Get the release-of-lien form notarized. File the form with your county recorder’s office. Your county recorder keeps track all the property owners in your county, and any related liens on property. The office may require a filing fee. This will make the release of your lien public.
- Keep a copy of the release-of lien for your personal records.
- An attorney can help you remove a lien from your property if you disagree with the existence of the lien or any details related to the lien. An attorney will assist you in researching the origins of the claim and negotiate final payment if you are responsible for the debt.
- When you pay a tax lien amount in full, the IRS will provide you with a release of the notice of federal tax lien about 30 days after you pay off your tax debt. You will forward that letter to your county recorder’s office to remove a lien on property.