Buyers : The lien follows the machine
If you are considering buying a piece of equipment you need to decide where your level of comfort lies in the deal. What amount of money would you risk losing if the equipment has liens or is stolen versus having a lien search conducted to verify the equipment is free and clear of encumbrance (secured debt). For example is $5,000 or $15,000 for a unit you are buying worth paying for twice (once to the seller, and once to the creditor if it carries debt because the lien follows that machine)? Or do you find more value in a lien search that might only be $100.00 to find out, get creditors cleared, and have peace of mind?
Never accept a written statement that the equipment is free & clear as a truth. It is statement you take to court not something that keeps you out of court.
Liens are not filed by serial number. Liens are filed on the debtor in the state a company is incorporated or the primary state of residence of an individual. That would be the state who issued a driver’s license or state ID.
Ground Clearance can assist you with the information in the lien search and how to obtain lien releases or payoffs. It is not legal to contact another person or company’s creditors without written consent.
If a seller requires the deal completed right away and will not allow time for a lien search or will not provide releases from creditors, there is a chance the machine(s) may be stolen or the seller is in financial trouble and does not want the funds to pay off a note attached to the machinery. The lien follows the machine. If you take possession and liens are not released, you will own the debt also.
Contact us with your situation and find out how we can help.
