Legal Question in Credit and Debt Law in New York

Re: purchase of property that has a bank lein on it

This is an interesting question

If the bank is the one repossessing the car

and conducting the sale, the sale will

be free of the lien, with the bank seeking

a deficiency against the prior owner

If it is a subsequent judgment debtor conducting

the sale, the lien is removed only if the

purchase price is sufficient to pay off the

purchase money lien. Otherwise, the

purchase price reduces the lien, but the

balance remains. This is a highly unusual

situation because of the complications in

not being able to pass clean title.