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Public Act 094-0411
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| HB0947 Enrolled |
LRB094 06720 DRH 36819 b |
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AN ACT concerning transportation.
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Be it enacted by the People of the State of Illinois,
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represented in the General Assembly:
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Section 5. The Illinois Vehicle Code is amended by changing |
Section 3-114 as follows:
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(625 ILCS 5/3-114) (from Ch. 95 1/2, par. 3-114)
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Sec. 3-114. Transfer by operation of law.
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(a) If the interest of an owner in a vehicle passes to |
another other
than by voluntary transfer, the transferee shall, |
except as provided in
paragraph (b), promptly mail or deliver |
within 20 days to the
Secretary of State the last certificate |
of title, if available, proof of
the transfer, and his |
application for a new certificate in the form the
Secretary of |
State prescribes. It shall be unlawful for any person
having |
possession of a certificate of title for a motor vehicle,
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semi-trailer, or house car by reason of his having a lien or |
encumbrance
on such vehicle, to fail or refuse to deliver such |
certificate to the
owner, upon the satisfaction or discharge of |
the lien or encumbrance,
indicated upon such certificate of |
title.
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(b) If the interest of an owner in a vehicle passes to |
another under
the provisions of the Small Estates provisions of |
the Probate Act of 1975 the
transferee shall promptly mail or |
deliver to the Secretary of State, within 120
days, the last |
certificate of title, if available, the documentation required
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under the provisions of the Probate Act of 1975, and an |
application for
certificate of title. The Small Estate |
Affidavit form shall be furnished by the
Secretary of State. |
The transfer may be to the transferee or to the nominee of
the |
transferee.
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(c) If the interest of an owner in a vehicle passes to |
another under
other provisions of the Probate Act of 1975, as |
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amended, and the transfer is
made by a representative or |
guardian, such transferee shall promptly mail or
deliver to the |
Secretary of State, the last certificate of title, if |
available,
and a certified copy of the letters of office or |
guardianship, and an
application for certificate of title. Such |
application shall be made before the
estate is closed. The |
transfer may be to the transferee or to the nominee of
the |
transferee.
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(d) If the interest of an owner in joint tenancy passes to |
the other
joint tenant with survivorship rights as provided by |
law, the transferee
shall promptly mail or deliver to the |
Secretary of State, the last
certificate of title, if |
available, proof of death of the one joint
tenant and |
survivorship of the surviving joint tenant, and an
application |
for certificate of title. Such application shall be made
within |
120 days after the death of the joint tenant. The transfer may
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be to the transferee or to the nominee of the transferee.
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(e) The Secretary of State shall transfer a decedent's |
vehicle title to
any legatee, representative or heir of the |
decedent who submits to the
Secretary a death certificate and |
an affidavit by an attorney at law on the
letterhead stationery |
of the attorney at law stating the facts of the
transfer.
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(f) Repossession with assignment of title. In all cases |
wherein a
lienholder has repossessed a vehicle by other
than |
judicial process and holds it for resale under a security |
agreement, and
the owner of record has executed an assignment |
of the existing certificate of
title after default, the |
lienholder may proceed to sell or otherwise dispose of
the |
vehicle
as authorized under the Uniform Commercial Code. Upon |
selling the vehicle to
another person, the lienholder need not |
send the certificate of title to the
Secretary of State, but |
shall promptly and within 20 days mail or deliver to
the |
purchaser
as transferee the existing certificate of title for |
the repossessed vehicle,
reflecting the release of the |
lienholder's security interest in the vehicle.
The application |
for a certificate of title made by the
purchaser shall comply |
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with subsection (a) of Section 3-104 and be accompanied
by the |
existing certificate of title for the repossessed vehicle.
The |
lienholder shall execute the assignment and warranty of title |
showing the
name and address of the purchaser in the spaces |
provided therefor on the
certificate of title or as the |
Secretary of State prescribes. The lienholder
shall complete |
the assignment of title in the certificate of title to reflect
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the transfer of the vehicle to the lienholder and also a |
reassignment to
reflect the transfer from the lienholder to the |
purchaser. For this purpose,
the lienholder is specifically |
authorized
to complete and execute
the space reserved in the |
certificate of title for a dealer reassignment,
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notwithstanding that the lienholder is not a licensed dealer. |
Nothing herein
shall be construed to mean that the lienholder |
is taking title to the
repossessed vehicle for purposes of |
liability for retailer occupation, vehicle
use, or other tax |
with respect to the proceeds from the repossession sale.
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Delivery of the existing certificate of title to the purchaser |
shall be deemed
disclosure to the purchaser of the owner of the |
vehicle.
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(f-5) Repossession without assignment of title. Subject to |
subsection (f-30), in
In all cases wherein a
lienholder has |
repossessed a vehicle
by other than judicial process and holds |
it for resale under a security
agreement,
and the owner of |
record has not executed an assignment of the existing
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certificate of title,
the lienholder shall comply with the |
following provisions:
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(1) Prior to sale, the lienholder shall deliver or mail |
to the owner at
the owner's last known address and to any |
other lienholder of record, a notice
of redemption
setting |
forth the following information: (i) the name of the owner |
of record
and in bold type at or near the top of the notice |
a statement that the owner's
vehicle was repossessed on a |
specified date for failure to make payments on the
loan (or |
other reason), (ii) a
description of the vehicle subject to |
the lien sufficient to identify it, (iii)
the right of the |
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owner to redeem the vehicle, (iv) the lienholder's intent |
to
sell or otherwise dispose of the vehicle after the |
expiration of 21 days from
the date of mailing or delivery |
of the notice, and (v) the name, address, and
telephone |
number of the lienholder from
whom information may be
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obtained concerning the amount due to redeem the vehicle |
and from whom
the vehicle may be redeemed under
Section |
9-623 of the Uniform Commercial Code. At the
lienholder's |
option, the
information required to be set forth in this |
notice of redemption
may be made a part of or accompany the |
notification of sale or other
disposition
required under |
Section 9-611 of the
Uniform
Commercial Code, but none of |
the information required by this notice shall
be construed |
to impose any requirement under Article 9 of the Uniform
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Commercial Code.
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(2) With respect to the repossession of a vehicle used |
primarily for
personal, family, or household purposes, the |
lienholder shall also deliver or
mail to the owner at the |
owner's last known address an affidavit
of defense. The |
affidavit of defense shall accompany the notice of
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redemption
required in subdivision (f-5)(1) of
this |
Section. The affidavit of defense shall (i) identify the |
lienholder,
owner, and the
vehicle; (ii) provide space for |
the owner to state the defense claimed by the
owner; and |
(iii) include an acknowledgment by the owner that the owner |
may be
liable to the lienholder for fees, charges, and |
costs incurred by the
lienholder in establishing the |
insufficiency or invalidity of the owner's
defense. To stop |
the transfer of title, the affidavit of defense must be
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received by the
lienholder no later than 21 days after the |
date of mailing or delivery of the
notice required in |
subdivision (f-5)(1) of this Section. If the lienholder
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receives the affidavit from the owner in a timely manner, |
the lienholder must
apply to a court of competent |
jurisdiction to determine if the lienholder is
entitled to |
possession of the vehicle.
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(3) Upon selling the vehicle to another person, the |
lienholder need not
send the certificate of title to the |
Secretary of State, but shall
promptly and within 20 days |
mail or deliver to the purchaser as transferee (i)
the |
existing
certificate of title for the repossessed vehicle, |
reflecting the release of the
lienholder's security |
interest in the vehicle; and (ii) an affidavit of
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repossession made by or on behalf of the lienholder which |
provides the
following information: that the vehicle was |
repossessed, a description of the
vehicle sufficient to |
identify it, whether the vehicle has been damaged in
excess |
of 33 1/3% of its fair market value as required under |
subdivision (b)(3)
of Section 3-117.1, that the owner and |
any other lienholder of record were
given the notice |
required in subdivision (f-5)(1) of this Section,
that the |
owner of record was given the affidavit of defense required |
in
subdivision (f-5)(2) of this Section,
that the interest |
of the owner was lawfully terminated or sold pursuant to |
the
terms of the security agreement, and the purchaser's |
name and address.
If the vehicle is damaged in excess of 33 |
1/3% of its fair market value, the
lienholder shall make |
application for a salvage certificate under Section
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3-117.1 and transfer the vehicle to a person eligible to |
receive assignments of
salvage certificates identified in |
Section 3-118.
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(4) The application for a certificate of title made by |
the purchaser shall
comply with subsection (a) of Section |
3-104 and be accompanied by the affidavit
of repossession |
furnished by the lienholder and the existing certificate of
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title for the repossessed vehicle.
The lienholder shall |
execute the assignment and warranty of title showing the
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name and address of the purchaser in the spaces provided |
therefor on the
certificate of title or as the Secretary of |
State prescribes. The lienholder
shall complete the |
assignment of title in the certificate of title to reflect
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the transfer of the vehicle to the lienholder and also a |
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reassignment to
reflect the transfer from the lienholder to |
the purchaser. For this purpose,
the lienholder is |
specifically authorized to execute the assignment on |
behalf
of the owner as seller if the owner has not done so |
and to complete and execute
the space reserved in the |
certificate of title for a dealer reassignment,
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notwithstanding that the lienholder is not a licensed |
dealer. Nothing herein
shall be construed to mean that the |
lienholder is taking title to the
repossessed vehicle for |
purposes of liability for retailer occupation, vehicle
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use, or other tax with respect to the proceeds from the |
repossession sale.
Delivery of the existing certificate of |
title to the purchaser shall be deemed
disclosure to the |
purchaser of the owner of the vehicle.
In the event the |
lienholder does not hold
the certificate of title for the |
repossessed vehicle, the lienholder shall
make application |
for and may obtain a new certificate of title in the name |
of
the lienholder upon furnishing information satisfactory |
to the Secretary of
State. Upon receiving the new |
certificate of title, the lienholder may proceed
with the |
sale described in subdivision (f-5)(3), except that upon |
selling the
vehicle the lienholder shall promptly and |
within 20 days mail or deliver to the
purchaser the new |
certificate of title reflecting the assignment and |
transfer
of title to the purchaser.
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(5) Neither the lienholder nor the owner shall file |
with the Office of
the Secretary of State the notice of |
redemption or affidavit of defense
described in |
subdivisions (f-5)(1) and (f-5)(2) of this Section. The |
Office of
the Secretary of State shall not determine the |
merits of an owner's affidavit
of defense, nor consider any |
allegations or assertions regarding the validity
or |
invalidity of a lienholder's claim to the vehicle or an |
owner's asserted
defenses to the repossession action.
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(f-7) Notice of reinstatement in certain cases.
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(1) Subject to subsection (f-30), if
If, at the time of |
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repossession by a lienholder that is seeking to
transfer |
title pursuant to subsection (f-5), the owner has paid an |
amount equal
to 30% or more of the deferred payment price |
or total of payments due, the
owner may, within 21 days of |
the date of repossession, reinstate the contract
or loan |
agreement and recover the vehicle from the lienholder by |
tendering in a
lump sum (i) the total of all unpaid |
amounts, including any unpaid delinquency
or deferral |
charges due at the date of reinstatement, without |
acceleration; and
(ii) performance necessary to cure any |
default other than nonpayment of the
amounts due; and (iii)
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all reasonable costs and fees incurred by the lienholder in |
retaking, holding,
and preparing the vehicle for |
disposition and in arranging for the sale of the
vehicle. |
Reasonable costs and fees incurred by the lienholder |
include without
limitation repossession and storage |
expenses and, if authorized by the contract
or loan |
agreement, reasonable attorneys' fees and collection |
agency charges.
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(2) Tender of payment and performance pursuant to this |
limited right of
reinstatement restores to the owner his |
rights under the contract or loan
agreement as though no |
default had occurred. The owner has the right to
reinstate |
the contract or loan agreement and recover the vehicle from |
the
lienholder only once under this subsection. The |
lienholder may, in the
lienholder's sole discretion, |
extend the period during which the owner may
reinstate the |
contract or loan agreement and recover the vehicle beyond |
the 21
days allowed under this subsection, and the |
extension shall not subject the
lienholder to liability to |
the owner under the laws of this State.
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(3) The lienholder shall deliver or mail written notice |
to the owner at
the
owner's last known address, within 3 |
business days of the date of repossession,
of the owner's |
right to reinstate the contract or loan agreement and |
recover
the vehicle pursuant to the limited right of |
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reinstatement described in this
subsection. At the |
lienholder's option, the information required to be set
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forth in this notice of reinstatement may be made part of |
or accompany the
notice of redemption required in |
subdivision (f-5)(1) of this Section and the
notification |
of sale or other disposition required under
Section 9-611 |
of the Uniform Commercial Code, but none of the
information
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required by this notice of reinstatement shall be construed |
to impose any
requirement under Article 9 of the Uniform |
Commercial Code.
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(4) The reinstatement period, if applicable, and the |
redemption period
described in subdivision (f-5)(1) of |
this Section, shall run concurrently if
the information |
required to be set forth in the notice of reinstatement is |
part
of or accompanies the notice of redemption. In any |
event, the 21 day
redemption period described in |
subdivision (f-5)(1) of this Section shall
commence on the |
date of
mailing or delivery to the owner of the information |
required to be set forth in
the notice of redemption, and |
the 21 day reinstatement period described in this
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subdivision, if applicable, shall commence on the date of |
mailing or delivery
to the owner of the information |
required to be set forth in the notice of
reinstatement.
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(5) The Office of the Secretary of State shall not |
determine the merits of
an owner's claim of right to |
reinstatement, nor consider any allegations or
assertions |
regarding the validity or invalidity of a lienholder's |
claim to the
vehicle or an owner's asserted right to |
reinstatement. Where a lienholder is
subject to licensing |
and regulatory supervision by the State of Illinois, the
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lienholder shall be subject to all of the powers and |
authority of the
lienholder's primary State regulator to |
enforce compliance with the procedures
set forth in this |
subsection (f-7).
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(f-10) Repossession by judicial process. In all cases |
wherein a lienholder
has repossessed a vehicle by
judicial
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process and holds it for resale under a security agreement, |
order for replevin,
or other court order establishing the |
lienholder's right to possession of the
vehicle, the lienholder |
may proceed to sell or otherwise dispose of the vehicle
as |
authorized under the Uniform Commercial Code or the court |
order. Upon
selling the vehicle to another person, the |
lienholder need not send the
certificate of title to the |
Secretary of State, but shall promptly and within
20 days mail |
or
deliver to the purchaser as transferee (i) the existing |
certificate of title
for the repossessed vehicle reflecting the |
release of the lienholder's security
interest in the vehicle; |
(ii) a certified copy of the court order; and (iii) a
bill of |
sale identifying the new owner's name and address and the year, |
make,
model, and vehicle identification number of the vehicle.
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The application for a certificate of title made by the |
purchaser shall comply
with subsection (a) of Section 3-104 and |
be accompanied by the certified copy
of the court order |
furnished by the
lienholder and the existing certificate of |
title for the repossessed vehicle.
The lienholder shall execute |
the assignment and warranty of title showing the
name and |
address of the purchaser in the spaces provided therefor on the
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certificate of title or as the Secretary of State prescribes. |
The lienholder
shall complete the assignment of title in the |
certificate of title to reflect
the transfer of the vehicle to |
the lienholder and also a reassignment to
reflect the transfer |
from the lienholder to the purchaser. For this purpose,
the |
lienholder is specifically authorized to execute the |
assignment on behalf
of the owner as seller if the owner has |
not done so and to complete and execute
the space reserved in |
the certificate of title for a dealer reassignment,
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notwithstanding that the lienholder is not a licensed dealer. |
Nothing herein
shall be construed to mean that the lienholder |
is taking title to the
repossessed vehicle for purposes of |
liability for retailer occupation, vehicle
use, or other tax |
with respect to the proceeds from the repossession sale.
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Delivery of the existing certificate of title to the purchaser |
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shall be deemed
disclosure to the purchaser of the owner of the |
vehicle.
In the event the
lienholder does not hold the |
certificate of title for the repossessed vehicle,
the |
lienholder shall
make application for and may obtain a new |
certificate of title in the name of
the lienholder upon |
furnishing information satisfactory to the Secretary of
State. |
Upon receiving the new certificate of title, the lienholder may |
proceed
with the sale described in this subsection, except that |
upon selling the
vehicle the lienholder shall promptly and |
within 20 days mail or deliver to the
purchaser the new |
certificate of title reflecting the assignment and transfer
of |
title to the purchaser.
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(f-15) The Secretary of State shall not issue a certificate |
of title to a
purchaser under subsection (f), (f-5), or (f-10) |
of this Section, unless the
person from whom the vehicle has |
been repossessed by the lienholder is shown to
be the last |
registered owner of the motor vehicle. The Secretary of State |
may
provide by rule for the standards to be followed by a |
lienholder in assigning
and transferring certificates of title |
with respect to repossessed vehicles.
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(f-20) If applying for a salvage certificate or a junking |
certificate, the lienholder
shall within 20 days make an |
application to the Secretary of State for a salvage certificate |
or a junking certificate, as
set forth in this Code. The |
Secretary of State shall
not issue a salvage
certificate or a |
junking
certificate to such lienholder unless the person from |
whom such vehicle has
been repossessed is shown to be the last |
registered owner of such motor
vehicle and such lienholder |
establishes to the satisfaction of
the Secretary of State that |
he is entitled to such
salvage certificate or junking |
certificate. The Secretary
of State may provide by rule for the |
standards to be followed by
a lienholder in order to obtain a
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salvage certificate or junking certificate for a
repossessed |
vehicle.
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(f-25) If the interest of an owner in a mobile home, as |
defined in the
Mobile Home Local Services Tax Act, passes to |
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another under the provisions of
the
Mobile Home Local Services |
Tax Enforcement Act, the transferee shall promptly
mail or |
deliver to the Secretary of State (i) the last certificate of |
title, if
available, (ii) a certified copy of the court order |
ordering the transfer of
title, and (iii) an application for |
certificate of title.
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(f-30) Bankruptcy. If the repossessed vehicle is the |
subject of a bankruptcy proceeding or discharge:
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(1) the lienholder may proceed to sell or otherwise |
dispose of the vehicle as authorized by the Bankruptcy Code |
and the Uniform Commercial Code; |
(2) the notice of redemption, affidavit of defense, and |
notice of reinstatement otherwise required to be sent by |
the lienholder to the owner of record or other lienholder |
of record under this Section are not required to be |
delivered or mailed; |
(3) the requirement to delay disposition of the vehicle |
for 21 days, (i) from the mailing or delivery of the notice |
of redemption under subdivision (f-5)(1) of this Section, |
(ii) from the mailing or delivery of the affidavit of |
defense under subdivision (f-5)(2) of this Section, or |
(iii) from the date of repossession when the owner is |
entitled to a notice of reinstatement under subsection |
(f-7) of this Section, does not apply; |
(4) the affidavit of repossession that is required |
under subdivision (f-5)(3) shall contain a notation of |
"bankruptcy" where the affidavit requires the date of the |
mailing or delivery of the notice of redemption. The |
notation of "bankruptcy" means the lienholder makes no |
sworn representations regarding the mailing or delivery of |
the notice of redemption or affidavit of defense or |
lienholder's compliance with the requirements that |
otherwise apply to the notices listed in this subsection |
(f-30), and makes no sworn representation that the |
lienholder assumes liability or costs for any litigation |
that may arise from the issuance of a certificate of title |
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based on the excluded representations; |
(5) the right of redemption, the right to assert a |
defense to the transfer of title, and reinstatement rights |
under this Section do not apply; and |
(6) references to judicial process and court orders in |
subsection (f-10) of this Section do not include bankruptcy |
proceedings or orders.
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(g) A person holding a certificate of title whose interest |
in the
vehicle has been extinguished or transferred other than |
by voluntary
transfer shall mail or deliver the certificate, |
within 20 days
upon request of the Secretary of State. The |
delivery of the certificate
pursuant to the request of the |
Secretary of State does not affect the
rights of the person |
surrendering the certificate, and the action of the
Secretary |
of State in issuing a new certificate of title as provided
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herein is not conclusive upon the rights of an owner or |
lienholder named
in the old certificate.
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(h) The Secretary of State may decline to process any |
application
for a transfer of an interest in a vehicle |
hereunder if any fees or
taxes due under this Act from the |
transferor or the transferee have not
been paid upon reasonable |
notice and demand.
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(i) The Secretary of State shall not be held civilly or |
criminally
liable to any person because any purported |
transferor may not have had
the power or authority to make a |
transfer of any interest in any vehicle
or because a |
certificate of title issued in error is subsequently used to
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commit a fraudulent act.
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(Source: P.A. 91-893, eff. 7-1-01; 92-807, eff. 1-1-03.)
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