What do I do if a lien holder won't sign the lien release after I pay the lien?

Does anyone have some advice??? I purchased a car for $200 from a guy who WAS a friend of mine. Instead of paying him the money right away we decided to have the title switched over to my name and just put a $200 lien on the title with him as the lienholder. I later paid him the $200 with a money order that lists him in the “pay to” section and the car make, model, and VIN in the “Description” section. I figured I would just get the lien release shortly before the next time that I renew the tags. He has now found out that he could have gotten more for the car from another friend and won’t fill out the lien release. He has the title (with me listed as the owner) in his possession and refuses to give it to me. He has also sent his friends to my house saying that they were going to take the car. What are my options?

Take him to small claims court.

You still have the receipt for the money order - yes or no? If yes, contact the sheriff’s office in your locale and see if they can help. If no, then you are up the creek. The title should be in your possession, not his. You were simply naive in this transaction and your “friend” is an SOB who is taking advantage of you.

In the future you should get a separate bill of sale for any major purchase such as a car. And you should have the title with the name of the lien holder on the title. Sometimes a bank or a leasing company will hold onto the title, but never another individual.

If you are listed as the “owner” on the current title, then the “friend” can’t sell the car without forging your signature. Forgery is illegal, but perhaps not beyond what this friend might do. You have the car and he has the title and neither of you can do anything (legally) to sell the car. If you give up possession of the car under intimidation then you have zippo. Hold onto the car. Document the $200 money order made out to the seller, and seek legal help.

The title should be in your possession, not his.

The title is in the possession of the lien holder…When you pay off the loan then you get the title. Doesn’t matter if it’s an individual or established bank.

Mike, if I understand the OP correctly he did pay off the lien, but now the lienholder wants more money than they agreed upon. Small claims court is really the only way to get the title.

$200 car? Must be sweet.

Mike, if I understand the OP correctly he did pay off the lien, but now the lienholder wants more money than they agreed upon. Small claims court is really the only way to get the title

I agree…I was responding to Uncle Turbo…And the way he made is statement led me to believe that the owner of the car should be in possession of the title BEFORE it’s paid off.

Got it.

Like I said in the other thread. In Minnesota, you have and hold the title but the title indicates the lien holder. Once the lien is paid, you get a lien release. You take the lien release and the title to the DMV and get a new title issued that has no lien holders indicated on it. Many people don’t bother to do this though and it doesn’t matter.

I believe he has the title but indicates a lien on it. He paid the lien, but the friend refuses to give him a release after payment. This is a breech of contract. The OP has the title and there is no way the friend has any claim to the car now and especially since the lien has been paid.

So like I said, possibly the DMV can force the issue with proof of the payment of the lien and issue a new title with no liens indicated on it regardless of the wishes of the friend. The other way is to go to small claims and get a court order to either the friend to release the lien or to DMV to reissue the title. Should be simple but bothersome. In the meantime if any of the friend’s friends try to do anything with the car, they have absolutely no claim and the Sheriff should be called. Its called theft or harrassment.

In this case, make new friends and keep your old ones doesn’t apply and is bad advice. First stop DMV. Second stop local court.

This is a good example of why you should NEVER do business with family or friends.

“This is a good example of why you should NEVER do business with family or friends.”

I see it as a reason why you should never do business with a scumbag. Unless you build in protection from them.

Yeah, thing is you think you are a good judge of character then a friend turns out to be a scum bag. I had an engine put in my diesel by a guy that seemed ok. Later decided to just junk the car and sold it to him for $200 with new tires and looking great except for the engine. 6 months later I got a notice of non payment of parking tickets. The title had never been changed. Didn’t have much to say when I called him and took a day to get it squared away at the state and county level.


Yes, OP’s friend turned out to be a scumbag

nevertheless I still think it’s a good idea to NOT do business with family or friends.

Ask for your $200 back and go on a search for a new car and a new friend.

I tend to agree with @dagosa

It is not worth hiring a lawyer for $200 worth of trouble

If your POS former friend doesn’t give the money back, just let it go.

You don’t need a lawyer for this. File in Small Claims court. I know I would in this situation.

Yeah but even though just $200, its his car, not the friends. $15 at DMV or $25 filing fee at small claims, and 15 minutes of the judge’s time and the Sheriff can handle the rest.

@db4690, I cosigned for my daughter when she bought her 2012 Cruze LS, and I’m not sorry I did. I will offer to sell both Cobalts to the other girls (I own, they drive) when they have steady jobs, and at near fair market price. They will get the buddy price, but I won’t give it away. And I have no doubt that they will pay off their debts in a timely manner.

Does the scumbag actually have the title in hand, or is it held by the state? Titles with liens are done that way here.

Scumbag may only be SAYING he has it. No problem, he can’t sell it without being guilty of forgery. Since the car is obviously worth more than $200, it would be a felony.

You can’t hire a lawyer for $200. Small claims court is the only way to settle this IF you have such a thing in your area. Small counties may not. If not, contact your friendly local county attorney or DA’s office. A judge can order the state to issue you a good title even if Scumbag doesn’t show up for court.

The small claims resolve is kind of what I was thinking I would have to do. I still have the receipt from the money order. The car is a 1995 Pontiac Trans Am with the 5.7ltr LT1 and a six speed transmission. It’s worth a bit more then $200. I talked to a county sheriff’s deputy that asked me if there was any written agreement on the purchase of the car. I told him that the $200 lien on the title is the only thing that there is. He said that (since the title is already in my name and the other guy is just listed as the lienholder) all I have to do is show proof that the $200 has been paid. I figure that if the money order receipt doesn’t work when I go to court. I should just come up with another $200 so that I’ll be able to pay the lien in front of the judge. Since the title is already in my name and just has the $200 lien. If I were to pay it again in front of the judge the guy would be forced to release the lien. Correct?