If I have a loan through a credit union, yet I hold a title to my vehicle that states no lienholder, can they still reposses my vehicle if it claims my loan was defaulted?

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If I have a loan through a credit union, yet I hold a title to my vehicle that states no lienholder, can they still reposses my vehicle if it claims my loan was defaulted?

Loan through credit union, issued check bought car direct from dealer. They erroneously sent me registration and title directly with no listed lienholder. Today they contacted me today a year after purchasing car and all payments were made as agreed. They stated I am in default of my loan unless I take the title to DMV to fix and they can take legal action and demand immediate payment. I didn’t like how I was spoken to and said then go ahead. I don’t care if they process a judgement or demand payment in full but can they take my car back since I have the title?

Asked on June 15, 2012 under Business Law, Delaware

Answers:

FreeAdvice Contributing Attorney / FreeAdvice Contributing Attorney

Answered 9 years ago | Contributor

Whether or not the lender can repossess the car based upon the facts that you have written depends upon what the loan agreement states. If the agreement states that there was to be a lien on your vehicle and you have not paid the loan off, the lender is entitled to a lien on your vehicle despite the fact that there may have been an error when you received title without a lien on the vehicle.

Potentially the lender could file suit to have the lien reinstated. However, the lender legally cannot repossess your vehicle at tthis time based upon what you have written. I suggest that you consult further if you have any more questions with an attorney that practices in the area of contract law.


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