(1) (a) Upon the satisfaction of the debt and release of a mortgage on a motor or off-highway vehicle filed for record as required by section 42-6-121: (I) The owner of the vehicle encumbered by the mortgage, the purchaser from or transferee of the owner as appears on the certificate of title, or the holder of a mortgage that was junior to the mortgage released, upon the receipt of the certificate of title, as provided in section 42-6-125, shall deliver the title to the authorized agent, who shall transmit the title to the director; or (II) The lienholder shall notify the authorized agent of the satisfaction of the debt and release of the mortgage, setting forth any facts concerning the right of the holder to release the mortgage as the director may require. The lienholder shall sign a satisfaction and release that is affirmed by a statement containing or accompanied by a written declaration that it is made under the penalties of perjury in the second degree, as defined in section 18-8-503, C.R.S. Upon receiving a valid satisfaction and release, the director or authorized agent shall note the release of the lien and shall issue a certificate of title for the motor vehicle, omitting all reference to the mortgage. (b) Upon the receipt by the director of a statement of mortgage release, the director shall: (I) Note on the records in the director's office to show the release of the lien of the mortgage; (II) Issue a new certificate of title to the motor or off-highway vehicle, omitting all reference to the released mortgage; and (III) Dispose of the new certificate of title in the manner prescribed in other cases unless directed otherwise. (2) For certificates of title that are maintained in an electronic format, any release of lien, mortgage, or encumbrance shall be filed prior to the issuance of a new certificate of title. In the event the holder of the lien, mortgage, or other encumbrance has filed bankruptcy or is no longer in business, the person seeking issuance of a new certificate of title reflecting the release of the lien, mortgage, or other encumbrance, which has been maintained electronically, shall either post a bond with the director in a reasonable amount determined by the director or shall wait until the period of the lien, mortgage, or other encumbrance expires.
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