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Judicial Foreclosure of VSF Liens on Low-Value Vehicles



By Brian Edward Walters, Attorney at Law


            Sometimes it feels as though Texas Department of Motor Vehicles offices have different standards for when you can foreclose on a vehicle storage facility lien depending on who is in the office and what time it is. We have heard stories about requiring different levels of documentation, including things like the certified mail tag, certified mail tag with stamp from the post office, the return receipt, the return receipt signed by the former owner, and even requirements that the DMV send out a notice to the owner before a title will be issued.

These differing paperwork requirements can quickly create a situation where the VSF cannot foreclose on its lien and sell a stored vehicle even if the VSF has done everything that is legally required. Bureaucracy at its finest, folks! So, what options do you have when your VSF has a vehicle that is abandoned, ready for sale, but you cannot get title through the usual channels? The answer depends both on the value of the vehicle and on how much money you must invest in the process. This article discusses the process for vehicles that are valued at or less than ten thousand dollars.

            The standard process for VSF lien foreclosure is what is known as a “non-judicial” foreclosure. Simply stated, that term means that you have avoided taking a trip to the courthouse in order to execute the VSF’s lien rights on the vehicle. It is similar in many respects to a foreclosure on real estate where the property is sold at the courthouse steps. In both cases, title to property transfers hands in a “lack of payment” situation without anyone going before a judge. There is, however, another method of foreclosing on the VSF lien known as the “judicial foreclosure.”

            Judicial foreclosure involves filing a lawsuit with the appropriate court and asking that court for an order granting the foreclosure of the lien. Which court you file in will depend on many factors, each of which is very important to getting an enforceable court order. It should be noted that this is not the same process as suing for title to a vehicle (which is only appropriate in a district court or, in some cases, a county court-at-law). Also, as previously stated, this discussion is limited to low-value vehicles (less than $10,000 in value).


            Justice courts (formerly known as “small claims courts”) are courts of very limited jurisdiction. Typically, they only hear claims involving $10,000 or less in controversy, whether in a lawsuit, eviction, or debt claims. However, justice courts are also allowed to hear cases where a person seeks foreclosure of a lien on personal property (i.e. not real estate) that is valued at $10,000 or less. In many cases involving damaged or abandoned vehicles, the vehicles will be within that range, giving justice courts the ability to grant the foreclosure request.

            Despite justice courts being able to grant the foreclosure, the process is far from simple. Rules about where to file, who to include in the lawsuit, and how to get the judgment are complex. It is almost always necessary to hire a lawyer for a judicial foreclosure because if you fail to include a necessary party to the proceeding, the court order will not be worth the paper on which it is written. Additionally, the parties involved (whether the justice of the peace, state agencies, or their attorneys and paralegals) will have questions about the proceeding that you will probably not be able to answer. That being the case, it is strongly recommended that you lawyer up for this process.

            Despite this being a bit of a law-intensive process, it is a good solution under many circumstances. First, if you have a vehicle that can’t be sold or junked without a title, it will simply waste away on your property forever. Second, if the DMV in your area is requiring paperwork you cannot get, you are stuck with that vehicle. Third, if there was someone left off the notice letters, you typically cannot go back and “re-notice” them because the delivery timelines have passed. In each of these situations, judicial foreclosure is a good last resort.

            While judicial foreclosure costs more in time and money than non-judicial foreclosure, it can be a handy tool under the right circumstances. It will require an attorney who is familiar with towing and storage laws as well as one who can educate the judge and, likely, opposing counsel on the subject. Finally, like any lawsuit, it absolutely must be done the right way the first time or it will be a fruitless endeavor. If, however, you can get the right person on the job (and typically do this for a few vehicles to get a better price), you can end up with title to vehicles that were otherwise stuck in legal limbo.

Contact Info

  • Southwest Tow Operators
  • 660 N Central Expressway, Suite 230
  • Plano, Texas 75074
  • Toll Free: (866) 320-9300

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