Removing a Lien in New Mexico
What Is a Lien?
A lien is a way for a property owner or service provider to insure themselves against losing out on money that is owed to them. It's a form of collateral.
In the case of your car title, a lien allows for a lienholder in New Mexico to repossess the car, should you default on or cease to make payments toward your car loan.
Types of Liens in New Mexico
While car title liens are common in New Mexico, the state allows for other types of liens to be placed on your vehicle, including:
- Towing liens.
- Mechanic's liens.
- Storage liens.
- Landlord liens.
- Abandoned vehicle liens.
In some of these cases, the car in question may be sold at public auction in New Mexico in order to settle the debt. The car owner must be notified of the plans to sell the vehicle before the auction takes place.
Who Is a NM Lienholder?
A lienholder is typically the person or company at risk of losing out financially, in the event that the buyer is unable to pay in full. In the case of your car title, the lienholder is the business or individual responsible for writing the car loan—typically a bank, credit union, or other lending institution.
In New Mexico, a lienholder will typically be in possession of the car title until you have satisfied the car loan.
Removing New Mexico Title Liens
Once you have paid off the loan on your car, your lender needs to send you the vehicle title indicating that it's clear from all liens against it.
Contact your lienholder and ask them to do one of the following:
- Send you a notarized release of lien on their company letterhead.
- Sign the “Release of Lien" section provided on your vehicle title.
- Complete and sign a Release of Lien (Form MVD-10041).
Bring the applicable document to your local New Mexico Motor Vehicle Division office, along with payment for titling fees.