Overhaulin'

I sold a car with a lien on it. Is this illegal?

When I bought my car in 2008, I put $30k down and the rest was financed as a "commercial loan" because the bank/dealership said that was the only way to get it approved. I didn't know what that meant, nor did I care, I just wanted the car. The bank then sent me the title the following month, with no lien showing on it. A year later I put the car up for sale, first calling the DMV and loan company and confirming no lien. I then sold the car (for $70k). The new owner went to register the car a few weeks later and to our suprise, the bank had just added a lien 3 days prior to her going to register it. (after a year of no lien showing) The problem is, I've already used much of her (the buyer's) money to pay down other higher interest loans. The bank says it just did some auditing and realized their mistake of having no lien. So now the buyer has a car she can't register, she's out $75k, and I don't have the money to pay off the loan. And I obviously don't have the money to buy the car back from her. I had planned to just keep making monthly payments until the "commercial loan" was paid off. What to do now?

Public Comments

1. Get a lawyer. I know they are a motley crew, but you probably can't get your money back without a lawyer. It is illegal to sell a car with a lien on it.
2. my guess is she is stuck with the lien. She waited too long to reg the car. The bank followed up on your inquiry and then placed the lien. If i were you i would try to document the date of your call and who you spoke to and the answer you were given. The bank may be out of order in this case.get started now with that documentation ,you are prob. going to need it. And see what the law in your state says about how much time you have to reg. a bought car. It is prob. like 7 to 10 days.
3. You sold a car you didn't own. She (the buyer) will be taking you to court to get her money back. There is no excuse for what you did. It is illegal and you will suffer the consequences.
4. Contact an attorney and hold on to the title they sent you. By the way didn't you find it strange that you were given a title to a vehicle that you were supposed to making payments on? Did you stop making payments once the bank told you the car was free and clear?
5. You can sell the car, even with a lien on it, as long as the loan against it is paid off immediately. If it is not, then you are liable for the loan/lien, and for any costs incurred by the purchaser, including her lawyer and expenses, and if you certified it lien free (even if it was a bank oversight) then it is considered fraud. You can be arrested. Get a lawyer and work something out with the bank to transfer the loan to something else. You are the one in trouble and you will be the one covering all the expenses. Move quickly or you will have a civil suit against you and a record too..