Bank Lean on Equipment

As to the lien situation- The only way to do it properly is to find out what the security interest perfection procedure is in the state where the seller lives. Some have county filing, some state- most will not have both. In Washington, for instance, going to the county will get you only blank stares- most of the employees who remember county "chattel mortgage" filings have long since retired. Its purely a state procedure here. If the bank hasn't filed its UCC-1 properly, their security interest loses out to your purchase. If they have filed (and they generally will, or they aren't in the business very long), either you check liens, find it, and take precautions to make sure they get paid with your purchase money, or you don't check, they come after the equipment, and you wind up "walkin' down the road, talkin' to yourself".

Secured Transactions was NOT my best subject in law school and I do NOT practice in this area so NO WARRANTY, this is worth exactly what you paid for it NOTHING but beware of lay persons opinions and dont hang your hat on ANYTHING posted here, seek local counsel familiar with your states laws and one experienced in these matters.

John T Retired Electrical Engineer and Country Lawyer in Indiana

Seems like good advice...buyer beware, hope for the best, and hope for an honest seller.

Mark

John T

Of course there is a fee to file the lein, and a fee to get it released.

I had borrowed a little against my D-2 Cat years ago, when I paid off the loan, it was going to cost me $20 to get it relased. It would expire in a couple of years and I just said to heck with it. didn't plan to use it for collateral anyway. Just kept my twenty bucks.

Gene

Once the loan was paid off, I would file a UCC-3 with the County Clerk and with the Texas Secretary of State to release the bank's lien on non-titled equipment.

I agree with both gentlemen below, check with your County Clerk to see if a lien exists on the equipment.

You might also check with the Secretary of State to see if a lien is recorded.

If a lien exists, make sure you contact the financial institution that is the leinholder for payoff instructions.

If a lien exists, I would suggest using an envelope draft from your financial instituion.

The envelope draft will be paid by your financial institution if the required documents to transfer posession are enclosed by the lienholder.

In my prior experience as a banker, I have seen too many people purchase a non-titled piece of equipment, pay the "owner" of the equipment, then later have the equipment reposessed because the "owner" did not pay off the loan that was secured by the equipment.

I have honestly told some of them "don't shoot me, shoot the guy you bought it from".

One day I will write a book about my experiences as a banker - not enought space or time on this forum.

Hope this helps.