| Perfection
|| Possession and Sale || New Title
and Plates || Other Issues
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| LAWDOG™ Montana Repossession |
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| Vehicle Lien Procedure With
limited exceptions, the department may not file voluntary security interest or lien unless
it is accompanied by or specified in the application for a certificate of ownership of
encumbered vehicle. If the approved notice form is transmitted to the department, the
security agreement or other lien instrument that creates the security interest must be
retained by secured party. A copy of the security agreement is sufficient as a lien notice
if it contains name and address of debtor and secured party, complete vehicle description,
amount of lien, and is signed by debtor. See Montana Statutes Section 61-3-103
from Montana State Library. |
| Notation On Certificate The
department files voluntary security interests and liens by entering the name and address
of the secured party upon face of the certificate of ownership. Involuntary liens must be
filed against the record of encumbered vehicle. The department mails a statement
certifying the filing of security interest or lien to secured party. The department mails
certificate of ownership to owner at address given on certificate. See Montana Statutes
Section 61-3-103 |
| Intervention By Creditor In
certain situations where transfer of ownership and filing of security interest are paid
for by a creditor or secured party, department returns the certificate of ownership to
county treasurer in county where vehicle is to be registered. The owner of a vehicle is
person entitled to operate and possess the motor vehicle. See Montana Statutes Section 61-3-103 |
| When Perfected At Transfer of Vehicle With
the exception of electronic lien filing as provided in 61-3-109
. and liens without transfer below, a voluntary security interest or lien is perfected on
date that lien notice and certificate of ownership or statement of origin are delivered to
county treasurer. On that date, the county treasurer issues to secured party a receipt
evidencing the perfection. Perfection under this section constitutes constructive notice
to subsequent purchasers or encumbrancers, from date of delivery of lien notice to county
treasurer, of the existence of the security interest. See Montana Statutes Section 61-3-103 |
| Liens Perfected Without Transfer Of
Ownership Voluntary security interests or lien filings that do not require
transfer of ownership are perfected on the date that the lien notice and the certificate
of ownership or manufacturer's statement of origin are received by the department. On that
date, the department issues to secured party a receipt evidencing the perfection.
Perfection under this subsection constitutes constructive notice to subsequent purchasers
or encumbrancers, from date that the lien notice is delivered to the department, of the
existence of the security interest. See Montana Statutes Section 61-3-103 |
| Report At Request of Other Creditor
The secured party under any security agreement of record, after receiving 15 days' notice
in writing served upon him in person by any creditor of debtor seeking to satisfy a demand
of such creditor against debtor, be required to make and file in the office of the county
clerk and recorder or other filing officer with whom the financing statement covering
security agreement is filed, an affidavit showing the amount of the debt then actually due
and owing to secured party 27-18-414 |
| Electronic Filing and Perfection
The Montana Department of Justice is charged with adopting rules and procedures designed
to constitute constructive notice of electronically filed and perfected liens to
subsequent purchasers or encumbrancers from the date of a lien's perfection. See Montana
Statutes Section 61-3-109 |
| Assignment When there is an
assignment by a secured party of security interest in a registered motor vehicle, a
copy of the assignment must be filed with department and a record of the assignment made
upon records. See Montana Statutes Section 61-3-201 |
| Also see changes which take effect under Section 61-3-103
on July 1, 2000. The new section covers electronic filing of security interests,
perfection, rights, procedure, and fees. |
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| Possession After Default Without Breach of
Peace Unless otherwise agreed a secured party has on default the right to
take possession of the collateral. In taking possession a secured party may proceed
without judicial process only if this can be done without breach of the peace. If not, a
legal action may proceed. See Montana Statutes Section 30-9-503 |
| Right To Redeem At any time
before the secured party has disposed of collateral or entered into a contract for its
disposition under 30-9-504, or before discharge under 30-9-505, debtor or any other
secured party may, unless otherwise agreed in writing after default, redeem the collateral
by tendering fulfillment of all obligations secured by the collateral, expenses reasonably
incurred by secured party in retaking, holding and preparing the collateral for
disposition, in arranging for sale, and to extent provided in agreement and not prohibited
by law, reasonable attorneys' fees and legal expenses. See Montana Statutes Section 30-9-506 |
| Compulsory Sale If the
debtor has paid 60% of the cash price in the case of a purchase money security interest in
consumer goods or 60% of the loan in the case of another security interest in consumer
goods and has not signed after default a statement renouncing or modifying his rights
under this part, a secured party who has taken possession of collateral must dispose of it
under 30-9-504, and if he fails to do so within 90 days after he takes possession the
debtor at his option may recover in conversion or under 30-9-507(1) on secured party's
liability. See Montana Statutes Section 30-9-505 |
| Acceptance As Satisfaction
In any other case involving consumer goods or any other collateral a secured party in
possession may, after default, propose to retain the collateral in satisfaction of the
obligation. Written notice of such proposal must be sent to debtor if he has not signed
after default a statement renouncing or modifying rights under this subsection. In the
case of consumer goods, no other notice need be given. In other cases notice must be sent
to any other secured party from whom secured party has received, before sending notice to
the debtor or before renunciation of rights, written notice of claim of interest in the
collateral. Notice by the secured party is sufficient under subsection and constitutes
steps reasonably required to inform another in the ordinary course if it is sent by
certified mail to most recent address provided by debtor or another secured party accoding
to rules in section. If the secured party receives objection in writing from a person
entitled to receive notification within 21 days after notice sent, secured party must
dispose of the collateral under 30-9-504. In the absence of such written objection,
secured party may retain the collateral in satisfaction of the obligation. See Montana
Statutes Section 30-9-505 |
| Sale And Application of Proceeds
A secured party after default may sell, lease, or otherwise dispose of any or all of the
collateral in its then condition or following any commercially reasonable preparation or
processing. Any sale of goods is subject to the chapter on sales (chapter 2). The proceeds
of disposition must be applied in the order following to reasonable expenses of retaking,
holding, preparing for sale or lease, selling, leasing, and the like and, to the extent
provided for in the agreement and not prohibited by law, reasonable attorneys' fees and
legal expenses incurred by secured party. Proceeds are then applied to satisfaction of
debt secured by the security interest under which the sale is made. See Montana Statutes
Section 30-9-504.
Also see disposition of proceeds in Section 27-18-804 |
| Subordinate Liens If any
proceeds remain, they would next apply to satisfaction of debt secured by any subordinate
security interest in the collateral, if written notice of demand is received before
distribution of proceeds is completed. If requested by secured party, holder of a
subordinate security interest must seasonably furnish reasonable proof of interest, and
unless he does so, secured party need not comply with demand. See Montana Statutes Section
30-9-504 |
| Accounting and Deficiency
If the security interest secures debt, secured party must account to debtor for any
surplus, and, unless otherwise agreed, debtor is liable for any deficiency. See Montana
Statutes Section 30-9-504 |
| Public or Private Sale After Notice
Disposition of the collateral may be by public or private proceedings and may be at any
time and place and on any terms, but every aspect of disposition including method, manner,
time, place, and terms must be commercially reasonable. Unless collateral is perishable or
threatens to decline speedily in value, reasonable notice of the time and place of any
public sale or the time after which any private sale is to be made must be sent by secured
party to debtor if he has not signed after default a statement renouncing or modifying
right to notice of sale. In the case of consumer goods no other notification need be sent.
See Montana Statutes Section 30-9-504 |
Subordinate Notice In other
cases notice must be sent to any other secured party from whom secured party has received,
before sending notice to debtor or before renunciation of rights, written notice of claim
of interest in the collateral.
Notice by secured party is reasonable under subsection and constitutes steps reasonably
required to inform another in the ordinary course if it is sent by certified mail to the
most recent address provided by debtor or another secured party following rules in
section. See Montana Statutes Section 30-9-504 |
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| Involuntary Transfer Application
In the event of a transfer by operation of law of any interest in a motor vehicle such as
inheritance, order in bankruptcy, execution sale, repossession upon default in performance
of terms of a lease or executory sales contract, or otherwise, the executor, trustee,
sheriff, or other representative or successor in interest of person whose interest is
transferred must forward to the department an application for a certificate of ownership
on approved form, together with a verified or certified statement of transfer of interest.
See Montana Statutes Section 61-3-201 |
| Verified or Certified Statement
The statement must set forth reason for the involuntary transfer, interest transferred,
name of person to whom interest is to be transferred, the process or procedure effecting
the transfer, and other information requested by the department. Evidence and instruments
otherwise required by law to effect a transfer of legal or equitable title to or an
interest in chattels as may be required in such cases must be furnished with the
statement. See Montana Statutes Section 61-3-201 |
If the department is satisfied that the transfer appears to meet legal
and other requirements, it sends to owner, conditional sales vendor, lessor, mortgagee,
and other lienor, as shown by its records, a notice of the intended transfer. After
sending the notice, the department must wait for a period of not less than 5 days before
the issuance of a new certificate of ownership and certificate of registration to
transferee. The notice required by this section is complied with by deposit in the U.S.
mail of the notice, postage prepaid, addressed to the person at the address shown on
department records for that person. See Montana Statutes Section 61-3-201
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Out of State When the
vehicle certificate of ownership that is involuntarily transferred is not registered in
Montana, the same procedure is followed in applying for a new certificate of ownership and
certificate of registration. However, instead of a statement, the department may
accept an affidavit of repossession on a form provided by the state in which a lien has
been perfected. See Montana Statutes Section 61-3-201
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