If my car was refinanced and a lien was put on my house as a security but my later house was foreclosed on, what happens to the lien?
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If my car was refinanced and a lien was put on my house as a security but my later house was foreclosed on, what happens to the lien?
And what if the car isn’t paid off by the time the loan matures? The interest rate is 16.75 so it’s taking forever to pay it off.
Asked on November 1, 2011 under Bankruptcy Law, Ohio
Answers:
FreeAdvice Contributing Attorney / FreeAdvice Contributing Attorney
Answered 12 years ago | Contributor
Good question. If you refinanced your vehicle and as security for the loan your home was used as security for the car's purchase and you ended up losing your home in a foreclosure, the lien for the car's loan was wiped out assuming the lien was a junior lien to the one that foreclosed upon the home.
The result is that there is no security left for the loan, but the lender for the car can sue on the promissory note for the loan if the car loan is not being kept current. If the car is not paid off by the time the loan matures, then the full remaining amount is due and payable.
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