Removing a Lien in Kentucky

If you are currently paying a car loan and you financed your car, there may be a lien on your car title. That means that the letter of the law does not consider you the owner of the vehicle.

Once you've completed making payments on the car, you can have the lien removed from the title with the Kentucky Transportation Cabinet.

What Is a Lien?

A lien is a way of legally protecting a property owner against any chance that he or she may not receive full payment for the item they are selling.

A lien on a car title is an aspect of a car loan. It gives the lienholder the legal right to repossess the vehicle should you—the car buyer—cease to make payments or default on your loan.

Many car loans will also allow for a lienholder to make some decisions regarding the car, such as determining the level of car insurance that must be purchased for the vehicle throughout the time the loan is being paid off.

Other Types of Liens in Kentucky

While a car title lien associated with an auto loan is common in Kentucky, there are other types of liens that can be placed on your vehicle, including:

  • Mechanic's lien—Ensures a person or company will be paid for the work or labor done to fix a car.
  • Towing and storage lien—Ensures a towing company or vehicle storage business will be paid for services when a car is towed involuntarily.

In either case, the car may be sold in order to pay the debt. The person or entity in possession of the car is required to notify the car owner before advertising a sale of the car.

Who is a KY Lienholder?

In the case of a lien on a car title for an auto loan, the person or corporation responsible for issuing your car loan is the lienholder. Throughout the time the loan is being paid off, the lienholder can also be referred to as the legal car owner. Typically, a lienholder is a bank, financial firm, or credit union.

Before you completely pay off your auto loan, the lienholder will be in possession or control of the car title. The lienholder's name may also appear on the title during that time.

Removing a Lien from a Kentucky Title

After you have paid off your car loan, your lender should release the lien, making it possible for you to complete a title transfer if necessary.

For your lien to be released, a Title Lien Statement (Form TC 96-187 is only available at a county clerk’s office) should be completed by your lender and submitted to your Kentucky county clerk.

After giving them some time for processing (perhaps a couple weeks), contact your Kentucky county clerk's office to ensure the lien has been released. You can then go in to have the lien release issued on the car title.

Forms

TC 96-187 Title Lien Statement

Submit this form to record, continue, OR remove a lien from a KY vehicle title. Form must be obtained from your county clerk's office. Not available online.

Download Open the form

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