Find the best financial services for you at: SMARTFINANCESOLUTIONS.NET - How to get a lien release for my car when the dealership committed fraud and filed for bankruptcy protection? - First, I apologize for the length of this description, but I assure you it is extremely unique situation.
I purchased a car in November 2009 from a smaller local (but reputable) import dealership in Minnesota, where I live. I traded in my vehicle and financed through a credit union. My paperwork from the dealership clearly states that there was no existing lien held on the vehicle at the time of sale.
I received a notice in the mail about 4-5 months later (Apr/May) that the dealership had filed for bankruptcy, but didn't think much of it. In June, I received a call from a different credit union stating they had a lien on the vehicle when it was sold to me, and that the dealership never used the funds from the credit union that I financed through to pay the original lien holder and get a lien release.
Furthermore, she told me that since the dealership had filed for bankruptcy protection, that they were now coming after me to collect the $13K still owed to them, threatening to repossess the car if I didn't sign a contract with them. Obviously I already had a contract with another credit union and didn't want to agree to pay anyone else, and around the same time I discovered there was a criminal investigation being conducted for fraud against the dealership. I submitted a testimony to the police and reached out to my credit union, but that resulted in a bunch of back and forth between both credit unions, each saying they wouldn't eat the cost of their respective loans. I knew this was going nowhere fast so I started looking at legal action. There were a number of creditors in line with priority -
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