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How do I get a title or lien release after my Chapter 13 plan has paid off a vehicle?

When the lien must be released. If your plan is completed or if the plan has paid the full original balance of the loan, you may request that the creditor give you your title or release its lien.


Title vs. lien release.  Buyers of vehicles financed prior to January 1, 2003 received titles to financed vehicles, and the financing creditor was listed as a lienholder on the title. When the vehicle is paid off, the creditor gives the buyer a lien release. The creditor retains the title to the vehicle for vehicles financed after that January 1, 2003. When the vehicle is paid off, the creditor gives the title to the buyer. The lender may also opt for MVD's Electronic Lien and Title in which no title is printed until the vehicle is paid off and the creditor then has MVD forward the title to the buyer.


Note regarding plans which reduce the balance of car payments: Many courts have held that if there is an unsecured portion to the creditor's claim (i.e., the plan paid the value and not the full balance of the claim), the creditor is not required to release the lien until all plan payments have been completed, including those due after the vehicle has been paid.


How to request the title or lien release. In many cases, a phone call to the creditor holding the lien, and requesting that the lien be released because payments are completed may be all that is necessary once all of the payment to that creditor have been completed.


In some cases, the creditor will want evidence that the required payments have been completed. In order to provide that information, you will need to:


1. Request a copy of the payment history for this creditor from your Trustee. That history should show that the full balance has been paid.


2. Make a copy of the Order Confirming your Chapter 13 Plan. A copy was mailed to you by our office shortly after your plan was confirmed. If you do not have a copy of the order, you may obtain one from our office or from the court for a small copy charge.


3. Forward a copy of the payment history and the order to the creditor. We recommend that you phone the creditor to determine where the request for the lien release should be sent. Be sure to advise them that you are in a Chapter 13 since a different department may be handling the release.


What to do if the lienholder does not send the release. Under ARS 28-2134, when a lienholder receives payment in full satisfying a lien, the lienholder is required to release the lien and deliver the certificate of title to the owner (unless there is a junior lienholder) within 15 days after the lien has been satisfied.


If the lien is not released, you may request that the Motor Vehicle Division (MVD) hold an Administrative Hearing and assess penalties against the lienholder. MVD may also satisfy the lien on its records if the holder of the lien cannot be found. You may find additional information about lien releases and requesting an Administrative Hearing at the MVD's web site, www.dot.state.az.us/mvd/, or at their customer service numbers, Phoenix 602-255-0072, Tucson 520-629-9808, and elsewhere in Arizona 800-251-5866.