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 10 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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