Second Lienholder

[LdiJ]

What is the name of your state? Michigan.
I run a repair facility where you use your title as collateral for a line of credit. A customer, who's title already had a lienholder, went into default on the loan. I had the vehicle repossessed after being added as a lienholder.
Can the first lienholder take possession of a vehicle that I repossessed as the second lienholder?

Absolutely yes. The first lien has priority. You would only be entitled to any proceeds remaining after the vehicle was sold and the first lienholder made whole.

 

[PayrollHRGuy]

You, the second lienholder, will not be able to transfer the title either to yourself or others without having the fist lienholder release the lien.

I can't think of any reason the 1st lienholder can't take physical possession of the car from you via repossession.

 

[quincy]

Repossession laws must be followed before the vehicle is sold. ProtoYaBish would be smart to consult with an attorney prior to thoughts of selling the vehicle.

 

[ProtoYaBish]

The first lien holder is entitled to payment before you (the second lien holder) is paid - so, although you potentially can sell the vehicle to satisfy your lien, the first lien holder must be paid from the sale proceeds before you can be paid.

Yes, I'm aware of that, my question is....Can the first lienholder take the vehicle from me?

 

[ProtoYaBish]

Repossession laws must be followed before the vehicle is sold. ProtoYaBish would be smart to consult with an attorney prior to thoughts of selling the vehicle.

Thank you, I'm not going to sell the vehicle. I'm holding it till the debt is paid in full by the customer. I'm asking can the first take the car from me?

 

[ProtoYaBish]

You, the second lienholder, will not be able to transfer the title either to yourself or others without having the fist lienholder release the lien.

I can't think of any reason the 1st lienholder can't take physical possession of the car from you via repossession.

Thank you, I'm not going to sell the car.

 

[LdiJ]

Thank you, I'm not going to sell the vehicle. I'm holding it till the debt is paid in full by the customer. I'm asking can the first take the car from me?

Yes, the first lienholder can do so.

 

[quincy]

Yes, I'm aware of that, my question is....Can the first lienholder take the vehicle from me?

Possibly. But the first lien holder probably will not take the vehicle if you are holding it for payment of a debt only.

Here is a link to Michigan’s Garage Keeper’s Lien Act:
https://www.legislature.mi.gov/(S(uddgwv552ot3ew453natxq55))/documents/mcl/pdf/mcl-Act-312-of-1915.pdf

 

[ProtoYaBish]

Yes, the first lienholder can do so.

Thank you!

 

[LdiJ]

Possibly. But the first lien holder probably will not take the vehicle if you are holding it for payment of a debt only.

Here is a link to Michigan’s Garage Keeper’s Lien Act:
https://www.legislature.mi.gov/(S(uddgwv552ot3ew453natxq55))/documents/mcl/pdf/mcl-Act-312-of-1915.pdf

A lot would depend however on whether or not the first lienholder is still getting paid. If the reason that the OP isn't getting paid is also something that would cost the first lienholder to not get paid either, then the first lienholder would likely want to protect themselves.

 

[quincy]

A lot would depend however on whether or not the first lienholder is still getting paid. If the reason that the OP isn't getting paid is also something that would cost the first lienholder to not get paid either, then the first lienholder would likely want to protect themselves.

Sure. All facts matter.

 

[ProtoYaBish]

Thank you all for your responses!

 

[quincy]

Thank you all for your responses!

You’re welcome, ProtoYaBish. We all appreciate the thanks so thank you.

If you have problems collecting on your debt, you can consult with an attorney in your area to decide what your next best course of action is.

Good luck.

 

[PayrollHRGuy]

Thank you, I'm not going to sell the car.

Great just keep in mind yo can't title it to yourself or business either.

 

[Zigner]

If the 1st lienholder catches wind of this, they can consider it to be a breach of the loan agreement. Just sayin'