Disclaimer: This is not legal advice. For personalized guidance, consult a qualified Texas attorney.
Detailed Answer
When an estate administrator settles a decedent’s debts, confirming that a vehicle loan is fully paid is vital. In Texas, lenders must release vehicle liens within 30 days after payoff (Texas Transportation Code Section 501.151). Likewise, under the Texas Uniform Commercial Code, secured parties must file a termination statement showing satisfaction of the security interest (Texas Business & Commerce Code Section 9.513).
Follow these steps to verify full satisfaction:
- Request a lien release document from the lender. This may be a signed lien release, an affidavit of satisfaction, or a payoff letter confirming a zero balance.
- Check the Texas Department of Motor Vehicles (TxDMV) record. Use the TxDMV’s Title Services portal to confirm the certificate of title no longer lists the lender as a lienholder.
- Order a UCC search. If the original financing statement (UCC-1) was filed with a county clerk or the Texas Secretary of State, request a search to confirm a UCC-3 termination statement is on file.
- Obtain the updated certificate of title. After lien release, the lender or TxDMV issues a new title without the lien notation. Secure the original title in the estate records.
- Retain all documentation. Keep the lien release, termination statement, payoff letter, and updated title together to prove the loan is satisfied.
Helpful Hints
- Act promptly: Lenders have 30 days to file lien releases after payoff.
- Get everything in writing: Verbal confirmations are not enough.
- Keep copies: Store both digital and paper versions of all documents.
- Verify online: Use the TxDMV and Texas SOS systems for real-time lien status.
- Consult an attorney: For complex estates, seek legal guidance early.