What are a lienholder's rights in a third party judgement?

Question Details:

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 9/30/2010 under Business | 680 View(s) | More Legal Topics

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Business Law Answers

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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