Disclaimer: This article is for educational purposes only and does not constitute legal advice. Consult a qualified attorney to discuss your specific situation.
Detailed Answer
Under Colorado law, an administrator handling an estate must ensure that any vehicle loan has been fully paid before transferring or selling a vehicle. Follow these key steps to verify full satisfaction of the outstanding loan:
- Obtain a Payoff Statement: Contact the lender directly and request a written payoff statement. This document shows the exact amount required to fully satisfy the loan as of a specific date. It typically expires after a short window, so act promptly.
- Secure the Lien Release: Once the lender receives payment, Colorado Revised Statutes require the secured party to file a termination statement or lien release. Under the Uniform Commercial Code, C.R.S. § 4-9-513(a) obligates the lender to file a termination within 20 days after satisfaction. For vehicles, lien releases often issue through the Department of Revenue’s Division of Motor Vehicles (DMV).
- Check the Certificate of Title: After the lien release is filed, request an updated Colorado certificate of title. The DMV will remove the lien notation. Colorado law mandates title updates under C.R.S. § 42-6-129. Verify that the title lists you or the estate as the sole owner with no active liens.
- Review UCC and DMV Records: In addition to the DMV title record, search the Colorado Secretary of State’s UCC database to confirm the lender has filed a termination statement. You can use the online UCC termination search at sos.state.co.us.
- Document Everything: Keep copies of the payoff statement, lien release document, updated title, and UCC termination. Include these in the estate’s records and file them with the probate court if required. Proper documentation protects the administrator from later disputes or creditor claims.
Helpful Hints
- Confirm the payoff statement date and amount include all fees and interest to the payoff date.
- If the lender delays the lien release, send a certified demand letter referencing C.R.S. § 4-9-513 and C.R.S. § 42-6-129.
- Use the Colorado DMV’s online title status tool to check lien status before ordering a paper title.
- Consult the probate court’s local rules; some courts require filing lien-release evidence before vehicle distribution.
- Retain all correspondence with the lender and the DMV in the estate file for at least the statute of limitations period.