The Easy Way to Get a Lien Release in Colorado
When you think of a lien, you are probably imagining the more renowned tax lien. But in reality, liens extend to all kinds of other assets, including cars or land. Others like house liens are actually quite common in the home buying process, only they are better known as mortgages.
Now, while having a lien is a pretty normal experience, it doesn't come without its repercussions. For starters, it makes it nearly impossible to sell or trade the property. Even worse, if your creditor enters it in your credit report, it can end up damaging your credit score. So, how then do you?
Well, usually, it all falls down to settling the debt owed. However, the process itself can be a bit more complicated, especially if the court is involved. In this article, we shall take an in-depth look into all you need to know about liens in Colorado, and how DoNotPay can help you out.
What Is a Lien?
A is a legal claim or right against a certain property by a creditor. Your typical lien would be placed against property like cars, homes, or land as collateral, meaning the creditor (banks or credit unions) can collect what you owe them should you fail to pay.
With a lien on your asset, you are bound to certain limits of what you can do with your property. For instance, if the lien isn't lifted, it can complicate the process of selling the property. The lien, in this case, will give the creditor legal rights to the property, more so if you, as the debtor, refuse to fulfill your financial obligation. In the worst case, the creditor can sell the property to claim the money owed.
What Are the Types of Liens?
There are many different types of liens depending on the asset they are attached to. They include:
|Specific liens:||These liens are related to a single asset. For instance, a car dealer will only have a lien on your car and none of your other properties.|
|General liens:||General liens stretch out to more than just one particular asset you own. This means the creditor can claim everything from your car, home, bank accounts, and even furniture.|
|Voluntary liens:||Also known as consensual liens, are where the bank or credit entity takes out a lien when you are advanced a mortgage.|
|Involuntary liens:||Here, the creditor files a lien with the state agency if you as the borrower fails to pay a financial obligation or loan. The lien will then be placed by either a government agency, contractor or another creditor.|
Property liens can further be split into other liens, including:
- Tax liens
- Mortgage liens
- Mechanics liens
- UCC liens
- Judgment liens
How to Remove a Lien?
Ideally, the easiest way to remove a lien is by paying off the attached debt. To do this, follow the steps below:
- Before anything, you'll need to confirm that the debt represented by the lien is valid
- Proceed by contacting the lienholder and work out a full payoff or repayment plan
- Once it is paid off, you should then file a release a lien form. This will act as evidence that you have satisfied your debt. You should be able to find all the relevant paperwork online, at an attorney or in the county clerk's office
- The lien holder should then sign the release of lien form in the presence of a notary
- File the release or lien form at your county's recorder's office. This would make it a public record. Make sure to ask for a release form and store copies of it.
Can You Remove a Lien in Colorado Without Having to Pay Off the Debt?
In some cases, you don't have to settle the debt owed to have the lien removed. Some liens can be removed by:
- Obtaining a court order to remove the lien – in Colorado, if the lien was obtained through illegal means like coercion, fraud, or bad faith, you could ask a judge to legally remove the lien. For this, you'll need to provide clear proof of the misdeed.
- Filing for a chapter seven bankruptcy – for some liens like judicial license, you can file for bankruptcy, and they'll be removed. However, some removals are only enforced for a certain time period.
- Negotiating personally with the creditor- you can privately contact your creditor and work out a settlement. This can be through mediation or arbitration.
- Letting the statute of limitations run its course – the state usually has laws setting a limitation on how long liens are valid or the time window a creditor has to file a suit against a defaulting debtor. If the time has passed, you can have the lien removed.
What Is a Lien Release Form?
As you may have guessed already, is a type of documentation you file to remove a lien claim from your property. However, before it is actually filed, your lienholder should first sign a lien waiver or sign a release of lien form. This shows that they've given up their rights to the lien against the property, usually after you've settled the debt.
Does a Lien Hurt My Credit Score?
The concern among most people is whether having a lien will dent your credit score and which types actually appear on your record. To shed light on the matter, there are some liens that might find their way on your record. These are mainly reportable ones like mechanic's liens or judgment liens.
This is because these liens will reflect in your repayment history, and this constitutes a chunk of your credit score (more than a third).
Others like consensual liens, which you are paying off, will not show up. Credit reporting agencies also quit reporting tax liens because they were often accompanied by disputes, inconsistencies, and errors.
For your creditor to report, they should have certain identifying information from the debtor. This includes:
- Date of birth
- Social security number
It is important to note that, even after paying it off, the lien might still appear on your credit report. This can be up to 7 years.
Can I Sell/Buy Property in Colorado with a Lien on In?
As we mentioned earlier, liens place limits on what you, as the owner, can do with the property. Trying to sell it will likely be an uphill task. Not to mention, buyers always steer clear of properties with liens attached to them. It is even harder if it is an involuntary lien.
However, there are exceptions. You can still sell CO property that has a tax lien, provided that the lien is satisfied before closing the sale. Alternatively, you can always negotiate with your buyer to take the responsibility of settling the lien. But many will not be too eager to do so.
With the right, to guide you through, you can still make a successful sale.
Let DoNotPay Help Remove Your Lien
Even for somebody who's already done this before, removing a lien can be a lot. The process of negotiating with your creditor and having them sign off on the release of the lien form can be extremely daunting. Not to mention, having it removed from your credit report can take a lot of time and effort.
If you don't want to do it yourself, DoNotPay is here to the rescue. You only need to sign up with us, fill in a few details and let us take care of the rest. We will compile any relevant information about your lien, start off the negotiation with your creditor and send out a release of lien form on your behalf.
And all you need to do is follow a few simple steps:
- Search for remove my lien on DoNotPay.
- Start our Remove My Lien product.
- Answer some questions about your specific lien and let us help you craft a letter to your creditor to resolve the issue.
DoNotPay Works Across All Companies/Entities or Groups With a Click of a Button
The best part about the DoNotPay app is that it has been designed to work across any entity and state. It can help negotiate a lien release with any company or creditor out there.
It is fast, easy to use, and has been proven successful in removing liens for thousands out there.
Additionally, we can help with other lien related issues, including:
- What is a lien release on a car
- Find out if a lien released on our house
- Learn how to fill out a lien release form
- Sell a car with a lien
- Learn how to remove a lien on property
- All about tax lien on credit report
- Remove state tax lien from public records
- Find out if you have a lien against you
What Else Can DoNotPay Do?
At DoNotPay we take pride in our versatility. Other than helping our clients remove liens; we can help with all kinds of other mundane tasks and online applications, including:
- Filing claims in small claims court
- Reaching customer service quickly
- Getting reduced property taxes
- Getting help paying off bills
- Cleaning up your credit report
- Closing unused accounts
With, you can finally reclaim 100% ownership of your property. Feel free to contact us today and let us assist you with all of your affairs.