Are Tractor Loans Unsecured ??

[Ductape]

It occurred to me today after i made an appointment to look at a very low hour, slightly used tractor. If tractors do not have titles, and a tractor owner has a loan out on the tractor........ if he / she sells the tractor but DOES NOT pay off the loan, is the new (meaning...... ME) tractor owner on the hook in any way (subject to having said tractor taken away by the lein-holder)??? If so.... is there any way to find out if the tractor has a lein on it?

 

[chh]

In OK a lien is registered with the state on tractors and construction equipment(by serial number the way I understand it). I don't know that anybody but law enforcement or a bank could check though. The only item I ever bought in your situation, I met the owner at the bank and paid the loan off myself with one check and gave him another check for the rest of the agreed upon price. He as happy, the bank was happy, and I didn't have to worry about anyone coming back on me.

 

[Bird]

If the tractor was financed, the lienholder probably filed something called a UCC (Uniform Commercial Code) form, and maybe some of our other members remember better than I and can give you more details (or you might ask a tractor dealer in your area), but I think the place it's filed may be different in different states. But if you find out where to check to see if such a document has been filed, you may be safe, or of course, you might ask the seller to provide a release of UCC form.

 

[Superduper]

If a lender could repossess furniture and stereos, I'm sure they could repossess the tractor, especially since the serial numbers are well documented. That doesn't say anything about how easy or difficult it will be to track the equipment down. In my financing agreement with Deere, they require that the equipment be insured and John Deere listed as loss payee. Don't know if that makes any difference, however.

Ok... just dug out my financing agreement. There is definitely a security clause which states that I agree that there is a lien in effect for the purchased equipment and that the equipment is being used as collatoral. Does that answer the question?

 

[Inspector507]

In Ohio, UCC filings are searchable by the creditor or lender. In your state you may or may not be able to find some info here.

edit........some lenders do not automatically remove UCC filings either. I requested NH remove mine and they sent me the paperwork to file to have it removed.

 

[Ductape]

I don't know that the tractor i'm going to look at DOES have any lein on it. I was just thinking about a worst case scenario. Around these parts, with the economy the way it is..... there is no shortage of landscapers and contractors of all kinds selling off equipment. Unfortunately, there are plenty of bankruptcies also. I could certainly see plenty of tractor owners having no problem being financed two years ago, and going belly up today. I would just to cover as many bases as possible, since as far as i can see, it would be easy to sell a tractor and then default on the loan. Wouldn't want to hypothetically, bring the tractor in for some service in a year..... and have the dealer say there is a problem and that i cannot come pick up my tractor because it is legally owned by NewJohnKubotaMassey Finance....

 

[sixdogs]

Years back I was all set to buy some fairly new equipment from a guy I knew was in trouble. At the last second I checked and he owed on all of it so we went to the bank together and I paid off his loan and he gave me the equipment. I feel sure he would have spent the money to pay other creditors and, you are right, it probably would have been taken from me.
I later learned this is fairly common and the lien is UCC recorded.
When I was about to buy something later on and the owner guy said he owned it I asked to show me the bill of sale. He did. If he could not find one I would not have bought it.

 

[oliver28472]

If you are buying it is advisable to do a lien search to see if the seller who is presumably the owner has any debt against the tractor or other equipment. In NC this is done online with the NC Secretary of State. Buyer beware! Lenders used to have to file in the county as well as the SOS. Now it's just the SOS. If one sells the property without paying the creditor they could be prosecuted for selling mortgaged property.

Also the creditor could go after the buyer and repossess the property or put a judgement against the buyer.

 

[art]

I know in NY that the lowest interest loans are called secure and that is with the equipment being the secured item. A personal loan will normally be a higher interest rate and unsecure. A secured loan will have the machinery listed at the county court house.

 

[flusher]

It occurred to me today after i made an appointment to look at a very low hour, slightly used tractor. If tractors do not have titles, and a tractor owner has a loan out on the tractor........ if he / she sells the tractor but DOES NOT pay off the loan, is the new (meaning...... ME) tractor owner on the hook in any way (subject to having said tractor taken away by the lein-holder)??? If so.... is there any way to find out if the tractor has a lein on it?

If the Seller says there's no lien, I would protect myself by including language in the bill of sale that says the Seller is the legal owner and that there is no lien on the tractor. That's what I did when I bought my 1964 MF-135 a few years ago.

If there is a lien, then get the Seller to show you the paperwork he signed to buy the tractor or his payment book. The name of the lienholder should be there.

My 2005 Kubota B7510HST is financed through Kubota Credit. I have all the paperwork and the payment book so there will be no problem if and when I decide to sell it.