What states can a car with a lien on it be disposed of?

None... because you can't pass clear title to ANYONE without the lien being satisfied, either via sale or gift... and being scrapped you HAVE to legally have a clear title. With a lien its not your car to dispose of without their approval.

You also can't shop around for a state to do something like this even if such a state existed. If a car is registered in a state then it has to be disposed of according to that state's laws.

Agree, the issue is, that as long as there is a lien, it is not a junk car and the owner does not have total right to dispose of it.

They will have to work with lender for repo, or have them sign off to allow it to be disposed