Legal Question in Bankruptcy in North Carolina

lien on title

I bought a jet ski in 1996 on a yamaha credit card. one of those revovling account cards. i sold the jet ski in 1999 promising to hand over the title when the card was paid off. in 2001 I filed for and got a title 7 bankruptcy that covered the yamaha credit card.the dedt was discharged. The man I sold it to is now asking for the title but yamaha says they still have a lien on it. The credit card company wants $2000 to release the title. What course of action should I follow.


Asked on 8/27/07, 5:24 pm

1 Answer from Attorneys
Craig Lane Craig Lane Law

Re: lien on title

First thing to note, it is illegal to sell property on which there is a lien, unless the lender is either paid off completely or gives their permission.

If the Yamaha debt was correctly listed in your petition as a secured debt, the law would have required that you surrender the jet ski back to the lender in return for the discharge of the debt.

Long story short, Yamaha does still have its lien on the jet ski and does not have to release the title. An enterprising bankruptcy attorney might make the argument that Yamaha is violating the Court's stay by insisting that you pay a debt that has been discharged, but I doubt that argument would win out in Court given that it appears that the debt was incorrectly listed in the initial petition.

And more bad news: the 1999 buyer of the jet ski might have a civil case against you because he paid for ownership of a jet ski (title), and you have not given him that.

This is potentially a tough spot for you.

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Answered on 8/28/07, 4:46 pm


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