Foreclosure of a Mechanic's Lien, Is your car at risk? Print E-mail
Written by Kerry S. Doolittle   
Friday, 09 April 2010

You take your car in for repairs.  The bill is much more than you expected and you either refuse to pay or cannot pay the repair shop.  The mechanic refuses to give your vehicle back to you until he is paid.  Now what?

A mechanic can claim and attempt to foreclose a lien against your car for the repair costs.  You can dispute the claim.  Who wins may depend upon which one of you knows the following details.

Mechanic's Lien, How Created.

All mechanics of every sort acquires a special lien on any vehicle for work done and/or materials furnished in repairing or servicing such vehicle. The lien may be asserted by recording on the title to the vehicle, or by retention of the vehicle until paid or satisfied through foreclosure.

Contesting the Lien.

If possession is retained, the owner-debtor may contest the validity of the amount claimed due by making a written demand upon the lien holder. The lien holder must institute foreclosure proceedings within ten days or the lien is forfeited.

If possession is not retained, and the lien is perfected by recording on the title, the lien holder must institute foreclosure proceedings withing thirty days or the lien is forfeited.
Foreclosure of the Lien.

The lien holder must make an affidavit to the local Magistrate, State, or Superior Court, showing all the facts necessary to demonstrate the creation of the mechanic's lien and the amount claimed to be due. 

The Court must serve notice upon the defendants (i.e. the owner(s), lessee(s), lien holder(s), and security interest holder(s), if any) of a right to request, withing five days of receiving the notice, a hearing to determine if reasonable cause exists to believe that a valid debt exists.

If no request for a probable cause hearing is timely file, the lien will be conclusively deemed a valid one, and foreclosure allowed.

If a hearing is requested in time, the Court must conduct the probable cause hearing within ten days of the filing of the request for a probable cause hearing.

If, at the probable cause hearing the Court determines that reasonable cause exists to believe that a valid debt exists, possession of the vehicle shall be given to the lien holder.

The defendants must ask for a full hearing within five days of the probable cause hearing to determine the validity of the debt.

The Court must conduct the full hearing within thirty days of the filing of the request for a full hearing.

After a probable cause hearing with no timely request for a full hearing, or after a full hearing, if the Court finds that a valid debt exists, then the Court will authorize foreclosure upon and sale of the vehicle to satisfy the lien if the debt is not otherwise immediately paid.

If the Court finds that the mechanic did not act in good faith, the Court may award damages to the defendants.

Any proceeding to foreclose a mechanic's lien must be instituted within one year from the time the lien is recorded or is asserted by retention.

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