Start My Answer

What is a Lien Release on a Car?

Sarah Edwards | March 23, 2023

Summary: When you purchase a car with a loan, the lender usually places a lien on your vehicle. You won’t obtain a clear title until they release the lien. If you find yourself struggling with car debt, SoloSettle can help you settle the debt once and for all and avoid going to court.

When you buy a vehicle, you’ll likely take out a loan. Cars typically cost thousands of dollars, and most people don’t have enough savings to buy a vehicle outright. Instead, they turn to lenders who finance their purchases. In exchange, they’ll make monthly payments, including interest, for the lender’s services.

People who still owe money on their vehicles won’t have a clear title. They can’t sell the car to someone else unless they satisfy the remaining loan balance or the buyer agrees to assume the loan.

Once the individual pays off their vehicle, they’ll have full ownership. When a lender removes a lien from a paid-off car, it’s known as a lien release.

If you’ve been sued for a car loan debt, you can avoid going to court when you settle the debt.

Settle with SoloSettle

Make an Offer

Why there is a lien on your car

You’ll have a lien on your vehicle if you buy it with the help of automobile financing. The lien is typically automatic. When you receive the car’s title, it will include the name of your financing company as a co-owner of the vehicle.

The lien acts as a form of protection for the lender. Since vehicle loans typically run into tens of thousands of dollars, lenders want to ensure you won’t take out the loan and run off with the vehicle without making a payment. A lien gives them the right to seize the car if you stop your monthly payments.

Sometimes, people use credit cards to pay for a vehicle. This is rare, but occasionally, consumers think they’ll save money by using a credit card to buy a car. In some cases, they can — especially if they take advantage of a no-interest financing opportunity and pay off the vehicle before the special financing ends.

However, many dealerships won’t allow you to buy a car with a credit card or will limit the amount you can spend to a certain threshold.

If you buy a car with your credit card, the bank won’t have an automatic lien on the vehicle. However, they can sue you to obtain one if you don’t keep up with your minimum payments.

Did your car loan company sue you for debt? Respond to their lawsuit with a Debt Answer.

How to get rid of a car lien

The primary way to obtain a lien release on a car is to pay off your outstanding loan. If you stick with your monthly payment plan, you’ll eventually pay off the vehicle. Following your last payment, your lender should release the lien and give you a clear title. After that, the car is entirely yours. You can sell it, trade it, or keep it until the tires fall off.

Occasionally, creditors seek to put a lien on your vehicle for other debts, like a credit card. If you are the sole owner of your car, a creditor can seek a judgment against you and attempt to put a lien on your vehicle.

Let’s consider an example.

Example: Joan owns a 2011 Toyota Corolla, which she’s paid off. She also has a credit card with DYI Financial, which she stopped making payments on. Currently, her outstanding balance with DYI Financial is $5K. DYI Financial sends her account to collections. Joan ignores the numerous letters and phone calls. One day, she receives a Complaint notifying her of DYI Financial’s debt lawsuit against her. Joan doesn’t respond and doesn’t show up for court. The judge awards DYI Financial a judgment against Joan, and they use it to place a lien on Joan’s Toyota. The lien allows them to seize Joan’s car and sell it via auction. DYI Financial hires a towing company to take Joan’s car to the auction. She’s given a few days to repay the debt before DYI Financial sells her Toyota. Joan repays the $5K debt to DYI Financial, and they return her car.


Releasing a car lien requires you to pay a debt

All car liens occur due to debt. Whether your vehicle financing company includes a lien on your loan or a creditor obtains one from a judgment, you must pay the obligation to release the lien. Once you repay the debt, you’ll receive a clear title for the car.

Is a creditor trying to put a lien on your car with a judgment? Settle the dispute with the help of SoloSettle.

Debt settlement is a good way to save money and avoid going to court. If you’re being sued over a car debt, follow these three steps to settle your debt:

  1. Respond to the lawsuit with a written Answer. Be sure to respond to the lawsuit before your state’s deadline. Even if you plan to settle the debt before the court date, responding will prevent a loss by default judgment. If you don’t respond, the party suing you can request a default judgment at any time, which would give them the right to garnish your wages and seize your property. For this reason, you should respond to the lawsuit ASAP before moving on with the debt settlement process.

  2. Send an offer to start negotiations. You’ll want to start with a lower offer than you can actually afford, giving yourself room to negotiate. Chances are you’ll go through several rounds of negotiations before you reach a settlement. On average, consumers can settle their debts for 50% of the original debt amount, so it’s possible to save hundreds, even thousands, with debt settlement.

  3. Get the settlement agreement in writing. It’s important to get everything in writing. This will help you avoid further legal issues. Be sure both parties sign the agreement, which should include the settlement amount and the stipulation that the lawsuit will be dismissed upon payment of the settlement.

SoloSettle can help you with each of these steps and more. To learn more about how to settle your debt, check out this video:

What is SoloSuit?

SoloSuit makes it easy to fight debt collectors.

You can use SoloSuit to respond to a debt lawsuit, to send letters to collectors, and even to settle a debt.

SoloSuit's Answer service is a step-by-step web-app that asks you all the necessary questions to complete your Answer. Upon completion, we'll have an attorney review your document and we'll file it for you.

>>Read the FastCompany article: Debt Lawsuits Are Complicated: This Website Makes Them Simpler To Navigate

>>Read the NPR story on SoloSuit. (We can help you in all 50 states.)

How to answer a summons for debt collection in your state

Here's a list of guides for other states.

All 50 states.



Guides on how to beat every debt collector

Being sued by a different debt collector? Were making guides on how to beat each one.


We have answers

Join our community of over 40,000 people.


You can ask your questions on the SoloSuit forum and the community will help you out. Whether you need help now are are just look for support, we're here for you.


Get Started

Win against credit card companies

Is your credit card company suing you? Learn how you can beat each one.

Going to Court for Credit Card Debt — Key Tips

How to Negotiate Credit Card Debts

How to Settle a Credit Card Debt Lawsuit — Ultimate Guide

Get answers to these FAQs

Need more info on statutes of limitations? Read our 50-state guide.

Why do debt collectors block their phone numbers?

How long do debt collectors take to respond to debt validation letters?

What are the biggest debt collector companies in the US?

Is Zombie Debt Still a Problem in 2019?

SoloSuit FAQ

If a car is repossessed, do I still owe the debt?

Is Portfolio Recovery Associates Legit?

Is There a Judgment Against Me Without my Knowledge?

Should I File Bankruptcy Before or After a Judgment?

What is a default judgment?— What do I do?

Summoned to Court for Medical Bills — What Do I Do?

What Happens If Someone Sues You and You Have No Money?

What Happens If You Never Answer Debt Collectors?

What Happens When a Debt Is Sold to a Collection Agency

What is a Stipulated Judgment?

What is the Deadline for a Defendants Answer to Avoid a Default Judgment?

Can a Judgement Creditor Take my Car?

Can I Settle a Debt After Being Served?

Can I Stop Wage Garnishment?

Can You Appeal a Default Judgement?

Do I Need a Debt Collection Defense Attorney?

Do I Need a Payday Loans Lawyer?

Do student loans go away after 7 years? — Student Loan Debt Guide

Am I Responsible for My Spouses Medical Debt?

Should I Marry Someone With Debt?

Can a Debt Collector Leave a Voicemail?

How Does Debt Assignment Work?

What Happens If a Defendant Does Not Pay a Judgment?

How Does Debt Assignment Work?

Can You Serve Someone with a Collections Lawsuit at Their Work?

What Is a Warrant in Debt?

How Many Times Can a Judgment be Renewed in Oklahoma?

Can an Eviction Be Reversed?

Does Debt Consolidation Have Risks?

What Happens If You Avoid Getting Served Court Papers?

Does Student Debt Die With You?

Can Debt Collectors Call You at Work in Texas?

How Much Do You Have to Be in Debt to File for Chapter 7?

What Is the Statute of Limitations on Debt in Washington?

How Long Does a Judgment Last?

Can Private Disability Payments Be Garnished?

Can Debt Collectors Call From Local Numbers?

Does the Fair Credit Reporting Act Work in Florida?

The Truth: Should You Never Pay a Debt Collection Agency?

Should You Communicate with a Debt Collector in Writing or by Telephone?

Do I Need a Debt Negotiator?

What Happens After a Motion for Default Is Filed?

Can a Process Server Leave a Summons Taped to My Door?

Learn More With These Additional Resources:

Need help managing your finances? Check out these resources.

How to Make a Debt Validation Letter - The Ultimate Guide

How to Make a Motion to Compel Arbitration Without an Attorney

How to Stop Wage Garnishment — Everything You Need to Know

How to File an FDCPA Complaint Against Your Debt Collector (Ultimate Guide)

Defending Yourself in Court Against a Debt Collector

Tips on you can to file an FDCPA lawsuit against a debt collection agency

Advice on how to answer a summons for debt collection.

Effective strategies for how to get back on track after a debt lawsuit

New Hampshire Statute of Limitations on Debt

Sample Cease and Desist Letter Against Debt Collectors

The Ultimate Guide to Responding to a Debt Collection Lawsuit in Utah

West Virginia Statute of Limitations on Debt

What debt collectors cannot do — FDCPA explained

Defending Yourself in Court Against Debt Collector

How to Liquidate Debt

Arkansas Statute of Limitations on Debt

Youre Drowning in Debt — Heres How to Swim

Help! Im Being Sued by My Debt Collector

How to Make a Motion to Vacate Judgment

How to Answer Summons for Debt Collection in Vermont

North Dakota Statute of Limitations on Debt

ClearPoint Debt Management Review

Indiana Statute of Limitations on Debt

Oregon Eviction Laws - What They Say

CuraDebt Debt Settlement Review

How to Write a Re-Aging Debt Letter

How to Appear in Court by Phone

How to Use the Doctrine of Unclean Hands

Debt Consolidation in Eugene, Oregon

Summoned to Court for Medical Bills? What to Do Next

How to Make a Debt Settlement Agreement

Received a 3-Day Eviction Notice? Heres What to Do

How to Answer a Lawsuit for Debt Collection

Tips for Leaving the Country With Unpaid Credit Card Debt

Kansas Statute of Limitations on Debt Collection

How to File in Small Claims Court in Iowa

How to File a Civil Answer in Kings County Supreme Court

Roseland Associates Debt Consolidation Review

How to Stop a Garnishment

Debt Eraser Review

Do Debt Collectors Ever Give Up?

Can They Garnish Your Wages for Credit Card Debt?

How Often Do Credit Card Companies Sue for Non-Payment?

How Long Does a Judgement Last?

​​How Long Before a Creditor Can Garnish Wages?

How to Beat a Bill Collector in Court

Not sued yet?

Use our Debt Validation Letter.


Out Debt Validation Letter is the best way to respond to a collection letter. Many debt collectors will simply give up after receiving it.


Let's Do It

It only takes 15 minutes.

And 50% of our customers' cases have been dismissed in the past.


"Finding yourself on the wrong side of the law unexpectedly is kinda scary. I started researching on YouTube and found SoloSuit's channel. The videos were so helpful, easy to understand and encouraging. When I reached out to SoloSuit they were on it. Very professional, impeccably prompt. Thanks for the service!" - Heather



Get Started