Detailed Answer
When an administrator handles an estate that includes a vehicle secured by a loan, it’s critical to confirm the outstanding loan balance is paid in full and the lien is released. Under Arkansas law, lenders must take specific steps to document satisfaction of a vehicle loan and remove any security interest from the title.
Step-by-Step Verification Process
- Obtain a Written Payoff Statement
Ask the lender for a payoff statement detailing the exact amount due as of a specified date. This statement should include principal, interest, and any fees. It serves as your roadmap for making the correct payment. - Make and Document the Payment
Pay the exact amount on or before the payoff date. Use a method that provides a receipt or confirmation (e.g., certified check or wire transfer). Retain proof of payment—bank records, confirmation emails, or a receipt letter from the lender. - Request a Lien Release or Satisfaction Letter
After payment, the lender must issue a lien release or letter of satisfaction. This document states the loan is paid and the security interest is terminated. - Confirm UCC Termination Filing
Under Ark. Code Ann. § 4-9-513, the lender must file a termination statement within 20 days of full payment. You can search for this filing at the Arkansas Secretary of State’s UCC online portal or request a copy from the lender. - Verify Title Records
Arkansas Code § 27-14-1403 requires lenders to notify the Department of Finance and Administration (DFA) that the lien is satisfied. The DFA updates the electronic vehicle record and issues a clear title or lien‐free substitution. The administrator can confirm the lien release by:
- Checking the new title issued by the DFA.
- Visiting the county clerk’s office or using the DFA’s online vehicle services to verify no active lien appears.
Arkansas Statutes and References
- Ark. Code Ann. § 4-9-513 – Lender’s duty to file a termination statement: https://law.justia.com/codes/arkansas/2023/title-4/chapter-9/subchapter-5/section-4-9-513/
- Ark. Code Ann. § 27-14-1403 – Satisfaction of lien on vehicle title: https://law.justia.com/codes/arkansas/2023/title-27/subtitle-4/chapter-14/subchapter-14/section-27-14-1403/
Helpful Hints
- Retain All Documentation: Keep the payoff statement, proof of payment, lien release, and any correspondence.
- Use Trackable Methods: Send payments and document requests via certified mail or courier to ensure delivery confirmation.
- Monitor Deadlines: Lenders have 20 days to file UCC termination and must notify DFA promptly.
- Verify Online: Many lien records and UCC filings are searchable online through the Arkansas Secretary of State and DFA portals.
- Consult an Attorney if Needed: If a lender fails to release the lien as required, an attorney can guide you through the dispute or seek court intervention.
Disclaimer: This article is for informational purposes only and does not constitute legal advice. Always consult a licensed attorney to address the specific facts of your situation.