Can I Sell My Car If IRS Puts A Lien On It
A lien on your title can bring a whole lot of trouble and will certainly prevent you from selling the car as long as there is a lien “tied” to it. Having a lien on your car title, for example from the IRS, means that you have to completely satisfy the contract clauses between yourself and the lien holder before you can get on with selling the car. On the other hand, if you want to sell the car only to satisfy the lean holder, then you shouldn’t have much trouble with it.
No matter whether the lien holder is the bank, or the dealership, the IRS and so on, the consequences are exactly the same. You have to pay the entire sum of money so that you can cover the loan before selling the car to a third party. One way to do it is to place an asking price for the car that is bigger than the amount of money you still have to pay, in order to finalize the whole process and remove the lien from your title. To get a total amount, you must ask your lien holder to give you a 15 days payoff period. Since you’ve established the amount that still needs to be paid, all you have to do is ask the buyer to write a check for that amount, and afterwards pay you the difference left. The moment the check clears, the lien holder will send a clean title to the buyer completing the transaction.
The experts from Edmunds.com highly recommend that the seller that has a lien on its title should perform the entire transaction at the lien holder’s location (in most cases a local branch of a bank). This way, the buyer can see there is no funny business, and the presence of a bank representative usually makes the transaction smoother and stress free for both parties. The seller gets rid of the loan and the buyer can get a great car for a bargain price, since the seller will only ask a bit more than the amount of the loan left to be paid. The moment you have established all the terms with a prospective buyer, you need to notify the lender so that he can do all the paperwork pending the new title. The moment all the paperwork will be done, the buyer writes a check to the lender for the remaining amount of the loan. After that he will get a new title directly on his name.
This is one of the best techniques of getting out of trouble, when dealing with a loan. It is ill advised to put a price on the car that is lower than the amount you have to pay to in order to cover the loan. So unless you are desperate, you might want to wait until you find a suitable buyer for the car. Make sure you find one before falling behind on your payments, because that will come with dire consequences. Failing to pay a loan for a car will come with harsh penalties, because first of all, the lien holder has every right to repossess the car. This will have disastrous consequences on your credit score. Repossession will leave a black mark on your credit history that will be difficult to clean. Usually it takes up to 5 years to completely clean up your credit history and restore your credit score to an acceptable value in order to obtain a loan with a decent rate. Finding a good buyer will help you avoid all that.