Expert: Michael Brotherton - 6/16/2008

Question
In 1995, my husband and I were in need of a personal loan and my mother
offered her car as collateral and was a cosigner. Then, in 1998, my husband
and I had to declare banckruptcy. We originally tried Chapter 13 and made
some payments on that loan, but eventually had to convert to Chapter 7. My
mother retained the car, but a lien was put on her title. Our case was
discharged in 2001 and then we heard nothing from the creditor. We
attempted to contact them to make arrangements to pay of the remainder of
the loan that we did not pay off in the Chapter 13 arrangements. We found
out that the loan company had been aquired, and when we contacted the
acquiring company, they had no record of the loan, or the lien or my name or
my mother's name. Since then, there have been no payments and no repo, but
the lien remains. My mother now wants to sell the car in question, but it still
has this lien. How can she get the lien removed if those who put the lien on
no longer exist and our file has disappeared? I have been told "Get a lawyer,"
but my mom is on a fixed income and my financial situation is not much
better than it was in 1998. Is it possible to fix this without a lawyer? Is there
such a thing as a statute of limitations in these matters? This is Illinois if that
is of significance. Any guidance would so very greatly appreciated.

Answer
Depending on the balance you may be able to file a small claims suit to get the judge to decide whether to release the lien or not. The problem is the creditor may find the account and require payment. On the other hand, they may decide to settle for less than is owed.

You may contact the company whose name appears as lienholder or their assignee and offer them $200 or whatever to sign off on the title. If they haven't found the file they may be willing to take the money and run with it. If they locate it then of course you may have to pay it.

I know of no other way to get it released. The creditor or the courts will have to sign off on it. Your choice where to go.