Disclaimer: This article is for informational purposes only and does not constitute legal advice.
Detailed Answer
When you serve as an estate administrator in Michigan and discover an outstanding vehicle loan, you must confirm that full payment has permanently extinguished the lien. Michigan law requires clear proof of satisfaction before transferring or selling the vehicle. Follow these steps:
1. Obtain a Written Payoff Statement
Contact the lender and request a written payoff statement. This document should detail the payoff date, remaining principal, accrued interest, and any fees. Ensure the payoff quote remains valid for at least 10 business days to avoid unexpected additional charges.
2. Secure a Lien Release Document
After you submit the full payoff amount, the lender must issue a lien release (also called a satisfaction piece). Under Michigan Compiled Laws Section 257.232, the secured party must notify the Secretary of State of the release within 45 days and provide you with a certified release document.
Statute reference: MCL 257.232 – Release of lien by secured party
3. Confirm with the Michigan Secretary of State
Use the lien release to verify the title status. You can:
- Visit the Michigan Department of State’s Title Inquiry Portal: michigan.gov/sos/vehicles/title-records
- Bring the original title and lien release to a local SOS branch for an in-person title search
A title record showing no active lien confirms full satisfaction.
4. Obtain a New Certificate of Title
Once the Secretary of State processes the lien release, they will issue a clear title listing you (or the estate) as the owner with no secured interest. This new title is your definitive proof that the loan is paid off.
5. Maintain Comprehensive Records
Keep copies of the payoff statement, proof of payment, the lender’s lien release, and the updated title. Well-organized records protect the estate from future claims and streamline estate settlement.
Helpful Hints
- Request payoff statements in writing to prevent misunderstandings.
- Verify the lender’s contact information through official channels.
- Follow up with the Secretary of State if title updates take longer than 60 days.
- Use a reputable title service if the estate holds multiple vehicles.
- Document every step in your estate administration file for transparency and auditability.