for me ok lang naman kung encumbered pa. as long as legit nga yung release of chattel mortgage papers. added hassle and expense ka lang nga to go to the registry of deeds for the unencumbered CR. so unless may runner ka and is ok to spend an additional 500-1k, ipa-release mo na lang sa previous owner. though i doubt na gagawin pa nya yun.

just last year may nabili ako na encumbered pa and that's the process i took. wala namang problema kasi pinalakad ko lang. good luck.