QUESTION

Written contract to privately finance tractor trailer buyer behind on payments

Asked on Apr 03rd, 2020 on Breach of Contract - Maryland
More details to this question:
We privately financed a semi truck to a friend. They turned around and put said semi up for collateral for a personal loan. Truck is now in repossession state through bank. What are our options. We didn't put a lien against the title. Can we repossess the truck since they financed it through us first?
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1 ANSWER

Appellate Practice Attorney serving New York, NY
No.  It's unclear to me whether your friend has even defaulted on your loan.  It's also unclear whether you were granted a lien and just neglected to file it, or simply never received a lien.  They're not automatic; you can lend money unsecured.  Also, lien or no, you have  no right to repossess prior to judgment (awarded after you win a lawsuit) unless your contract says you do, so you would have to win a lawsuit before you could do anything with the truck.  In any event, the party who files their lien first has first priority, thus even if you had a lien and could foreclose on it, any judgmet of foreclosure, and any buyer in foreclosure, would take subjec to the senior lien, i.e. the first filed.  None of this, however, affects your right to sue your friend if he defaults on paying you back, it only affects your ability to use the truck to satisfy the debt if he can't otherwise pay you. 
Answered on Apr 04th, 2020 at 12:19 PM

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