Consumer Protection Law
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Unfortunately, you will not likely be able to get clear title. Although they have "charged off" the loan on their books, the amount is still legally due and they would not release the lien without the remainder being paid off. The "charge off" is simply something that they enter on their books but does not have any bearing on the legal status of the loan still being owed. I wish I had better news for you, but the law just doesn't provide an avenue to obtain clear title in this type of situation without actually paying off the remainder of the loan.
Since they never entered a judgement does SOL enter here
Yes, absolutely. If the statute of limitations is past, then they could not sue you in court to enforce the debt. But, that is a separate issue and as long as the debt is still owed, even if unenforceable, they would be able to assert the lien. That is because legally, the debt and the lien is a separate thing. For example, if someone discharges debt in bankruptcy, that debt is no longer legally enforceable and the creditor cannot collect on the debt. However, a discharge or elimination of the debt in bankruptcy does not also discharge the lien and although the lender cannot enforce a debt interest, it can enforce the lien interest. This situation is similar if the statute of limitations has expired. They could not enforce the debt but they could enforce the lien interest. As such, they likely would not release the lien without payment in full. You could certainly ask them about it (and if the SOL has expired that would give you a lot of negotiating power), but it's very unlikely they'll release the lien without at least some payment from you.
Should I offer to pay at least the interest on the loan. Could this give me a clear title?
Sure, they have the right to grant you clear title if they want -- they just don't have too and there is no way to force them to do so. If I were you, I would just contact them first and ask about obtaining clear title. If they say to pay in full, then I would remind them they can no longer enforce the loan (if the SOL has expired) and I would start very low. Maybe with less than interest owed (depending on what interest is owed and what the value of the vehicle is). Then see what they say and go from there.
Can I provide additional assistance? If so, just let me know. Thanks.
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