My father in-law is lienor for his brothers motorcycle. the motorcycle was repo. what happens to the lienor?
It will be auctioned off from my understanding along with other properties to repay a loan. But is this legal if there is a lienor? What happens? Can the lienor reclaim the rights to the liened property (motorcycle?)
JB above me is correct that your father in law can claim the bike as the guarantor of the loan, but he would have to pay the full amount owed up front to do so.
Assuming that he is not going to do so, the bike will be sold at public auction with the loan company taking whatever amount is offered. The balance now between what they collected at the sale ( which is usually just a fraction of what the bike is worth on the open market) and the amount still outstanding on the loan is what the guarantor ( your father in law) is going to be billed for. If he doesnt pay, he will have his credit ruined plus the loan company will sue him in court .
Unfortunately, this is what happens when someone assumes being guarantor of a loan that goes into collection.
Best of luck and I hope this is useful to you
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The lien holder has the right to reclaim the item, by paying for the second lien. If they do not wish to do so, then the item may be sold to recoup the monies and the first lien holder is out of luck.
If your father-in-law has his name on the title, then he may also wind up getting a bad credit rating for allowing the motorcycle to go into repo.
He needs to talk to a lawyer.
References :
JB above me is correct that your father in law can claim the bike as the guarantor of the loan, but he would have to pay the full amount owed up front to do so.
Assuming that he is not going to do so, the bike will be sold at public auction with the loan company taking whatever amount is offered. The balance now between what they collected at the sale ( which is usually just a fraction of what the bike is worth on the open market) and the amount still outstanding on the loan is what the guarantor ( your father in law) is going to be billed for. If he doesnt pay, he will have his credit ruined plus the loan company will sue him in court .
Unfortunately, this is what happens when someone assumes being guarantor of a loan that goes into collection.
Best of luck and I hope this is useful to you
References :