What are a lienholder’s rights in a third party judgement?
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What are a lienholder’s rights in a third party judgement?
My LLC is lienholder on a vehicle worth around $10,000. The person on title now has a judgment filed against them. Will I lose my equity in the vehicle now? Does the judgement supercede my interest in this vehicle?
Asked on September 30, 2010 under Business Law, California
Answers:
M.T.G., Member, New York Bar / FreeAdvice Contributing Attorney
Answered 13 years ago | Contributor
It is all about priority in a situation like this. Lien holders generally have priority over judgement creditors. Look at the bank holding a mortgage versus credit card companies with a lien against the property. The credit card judgement filed against a piece of property never has priority over the first lien holder. But I would worry that this is a trend with your title holder will have more and more against them and then file bankruptcy and then, well, you can see where this is going. So I would consult with your financial advisers as to how to handle this in your best interests before it is too late. Good luck.
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