Detailed Answer
As an estate administrator in Alabama, you must confirm that any outstanding vehicle loan is fully paid before transferring or disposing of the vehicle. Follow these four steps to verify loan satisfaction under Alabama law:
1. Request a Lien Release from the Lender
Send a written request to the lender or loan servicer. Include a copy of the death certificate and your letters of administration. Under Ala. Code § 32-8-242, a lien holder must provide a lien release within 30 days after the debt is paid in full.
2. Obtain a Paid-in-Full Statement
Ask the lender for a payoff statement marked “Paid in Full.” This document should include the vehicle’s VIN, payoff date and show a zero balance. It serves as proof that no further payments are due.
3. Verify Title Status with ALEA
Submit the lien release, paid-in-full statement and the existing title to the Alabama Law Enforcement Agency (ALEA). ALEA’s Motor Vehicle Division will issue a new title free of liens. For details, visit ALEA Certificates of Title.
4. Document and Preserve Records
Keep copies of all communications, lien releases, paid-in-full statements and the updated title in the estate file. Well-organized records protect you if creditors later dispute payment status.
Disclaimer: This article is for informational purposes only and does not constitute legal advice. Consult a qualified attorney to address your specific situation.
Helpful Hints
- Review Ala. Code § 43-2-640 on an administrator’s duties and recordkeeping requirements.
- Send requests and documents by certified mail with return receipt for proof of delivery.
- Use ALEA’s online portal to track your title application and lien release processing.
- If the lender fails to issue a lien release, consider filing a bond with ALEA under Ala. Code § 32-8-243.