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socrateaser
socrateaser, Attorney
Category: Bankruptcy Law
Satisfied Customers: 33544
Experience:  Attorney and Real Estate Broker -- Retired (mostly)
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If a person filed chapter 7 and their auto lender did not appear

Resolved Question:

If a person filed chapter 7 and their auto lender did not appear at the creditors meeting, did not issue a re-affirmation of the loan, or request the vehicle be returned, what is the recourse for the lender? The lender promised to modify a loan and did not.
The vehicle purchaser subsequently stopped making payments on the vehicle. The lien holder has not been able to locate the vehicle to repossess it.

Is there a statute of limitations on their being able to repossess the vehicle? What recourse does the vehicle purchaser have?
Submitted: 1 year ago.
Category: Bankruptcy Law
Expert:  socrateaser replied 1 year ago.
If a person filed chapter 7 and their auto lender did not appear at the creditors meeting, did not issue a re-affirmation of the loan, or request the vehicle be returned, what is the recourse for the lender?

A: If the lender has a secured interest filed with the DMV, and a contract which contains a right to possession upon default of the borrower, then the lender's recourse is to repossess the vehicle.

The lender promised to modify a loan and did not.

A: This is not legally actionable, unless the borrower paid something in addition to the loan payments in consideration for the promise. I suspect this may be a dead end.

The vehicle purchaser subsequently stopped making payments on the vehicle. The lien holder has not been able to locate the vehicle to repossess it.

A: The lien holder could contact the sheriff/police and report the vehicle as stolen -- or, it could continue to try to locate the vehicle and repossess it from the borrower.

Is there a statute of limitations on their being able to repossess the vehicle? What recourse does the vehicle purchaser have?

A: There is no statute of limitations, as long as the lien holder upon notice of a request to transfer the vehicle provides notice to the department that title is being held for nonpayment of the loan. Vehicle Code 5911.

The vehicle belongs to the lender, and the lender is not permitted to negotiate a settlement of the debt to release the lien without consent of the bankruptcy court. This pretty much makes the vehicle unmarketable, but the borrower could continue to register the vehicle as long as the lender does not exercise its repossession rights.

Hope this helps.

NOTICE: My goal here is to entertain while educating the public about the law. I hope my answer is useful and informative to you. During our conversation, the website may ask you to rate my answer. If you rate my answer lower than the middle rating, then the website retains your entire payment, and I receive nothing. It is entirely your choice as to how you rate my answer. However, because your payment to me is in the nature of a donation/gift, rather than as compensation for any services rendered, you are entitled to know how your rating affects the final distribution of your donation.

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Customer: replied 1 year ago.

Research into the collection practices of the lender reveals
pages and pages of complaints, including some with the BBB regarding making promises to modify/ restructure loans in exchange for making payments on delinquent loans.


Buyer was considering returning the vehicle as part of the chapter 7, but seller rep promised to modify loan after certain number of payments were made. The lender did not honor this promise, and that is what started the stalemate. The lender stated that modification of loans was a practice of the company they acquired, and the buyer was given that information in error, but they do not currently engage in this practice. Would this be actionable in small claims court for the return of monies paid under the promise of modification? Again, buyer was told the lender would modify loan after payments were made. That is the only reason the car was kept during the chapter 7.


 


As for reporting the vehicle stolen, this is a civil dispute,
not a criminal matter. How does this scenario equate to theft?

Expert:  socrateaser replied 1 year ago.
Would this be actionable in small claims court for the return of monies paid under the promise of modification? Again, buyer was told the lender would modify loan after payments were made. That is the only reason the car was kept during the chapter 7.

A: Unless payments were actually made in reliance upon the lender's promise, there is no detrimental reliance, and so no consideration for a modification of the original contract. Without consideration, the lender's actions, while perhaps a false promise, does not rise to the level of a legally actionable claim, because the debtor was not injured. Only by making payments would the debtor be able to show an injury for which a claim could be made in small claims court.

 

As for reporting the vehicle stolen, this is a civil dispute, not a criminal matter. How does this scenario equate to theft?

A: You stated that the creditor cannot locate the vehicle. My (perhaps incorrect) assumption is that the debtor is concealing the vehicle so that it cannot be repossessed. Once the contract is breached and the lender's right to repossess attaches, the concealment of the vehicle could be viewed as an attempt to permanently deprive possession of the vehicle from its owner (the lender has title to the vehicle). That is the exact definition of a criminal theft under California law. Penal Code 484; 496a.

Hope this helps.

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If you need to contact me again, please put my user id at the beginning of your question ("To Socrateaser"), and the system will send me an alert. Please Click the following link for IMPORTANT LEGAL INFORMATION. Thanks and best wishes!

Customer: replied 1 year ago.



Payments were made on two separate occasions totaling
approximately seven thousand dollars to the lender to reach a certain number of
payments made on the account to modify the loan. Only after the buyer had reached the stated
number of payments was the buyer told that the lender did not engage in this
practice. Four separate representatives
told the buyer that the loan would be modified after 36 payments were made.





The monies paid to the seller would have been used to
purchase another vehicle had the buyer known the seller had no intention of
modifying the loan. This seems to be a
common practice for the lender as noted in the literally hundreds of complaints
alleging the same.





In small claims court with a different burden of proof,
would there be a reasonable cause of action with evidence corroborating the
claim of misrepresentation by the lender associates? Again, the point of contention being the
payments made were only done so based upon the information provided by the
lender.

Expert:  socrateaser replied 1 year ago.
In small claims court with a different burden of proof,would there be a reasonable cause of action with evidence corroborating the claim of misrepresentation by the lender associates? Again, the point of contention being the payments made were only done so based upon the information provided by the lender.

A: The burden of proof in small claims court is identical to Superior Court. The principal difference between small claims and Superior Court is that hearsay evidence is permitted, unless its probative value is substantially outweighed by the risk of unfair prejudice, wasting time, confusion of issues, or misleading the court. So, a lot of stuff ends up in evidence which would not be admissible in Superior Court.

That said, if you have trustworthy evidence that the creditor tricked you with a promise that it would modify your loan after a certain number of payments were made, then that would provide detrimental reliance, and permit the court to find that misrepresentation was committed, which would further permit the court to order damages in your favor in the amount of the payments made in reliance upon the misrepresentation (up to the small claims $10,000 maximum).

Hope this helps.

NOTICE: My goal here is to entertain while educating the public about the law. I hope my answer is useful and informative to you. During our conversation, the website may ask you to rate my answer. If you rate my answer lower than the middle rating, then the website retains your entire payment, and I receive nothing. It is entirely your choice as to how you rate my answer. However, because your payment to me is in the nature of a donation/gift, rather than as compensation for any services rendered, you are entitled to know how your rating affects the final distribution of your donation.

If you need to contact me again, please put my user id at the beginning of your question ("To Socrateaser"), and the system will send me an alert. Please Click the following link for IMPORTANT LEGAL INFORMATION. Thanks and best wishes!

Customer: replied 1 year ago.



I have found the complaints from hundreds of consumers on
various websites, including the BBB alleging similar behavior to my
incident. Would that type of
corroboration be admissible in small claims?





Secondly, who would be the person to serve if one were to pursue
a case against the lender?

Expert:  socrateaser replied 1 year ago.
Character evidence is admissible at the discretion of the judge. Habit/Routine is also admissible, and it is much more compelling. The difference is that Character is an attempt to assert that a trait or predisposition of a party proves that the party should be held liable -- when in fact, predisposition is not the same as habit.

Habit/Routine means that the party's conduct is more than merely an alleged character trait --- rather it is the routine of the party to engage in a particular conduct. You have to explain to the court that you are offering this evidence as proof of a particular custom of the other party to engage in a specific wrongful act. If successful, then your evidence is admissible and the judge can use it to infer that the party is engaging in the same conduct as part of the current legal action.

Hope this helps.

NOTICE: My goal here is to entertain while educating the public about the law. I hope my answer is useful and informative to you. During our conversation, the website may ask you to rate my answer. If you rate my answer lower than the middle rating, then the website retains your entire payment, and I receive nothing. It is entirely your choice as to how you rate my answer. However, because your payment to me is in the nature of a donation/gift, rather than as compensation for any services rendered, you are entitled to know how your rating affects the final distribution of your donation.

If you need to contact me again, please put my user id at the beginning of your question ("To Socrateaser"), and the system will send me an alert. Please Click the following link for IMPORTANT LEGAL INFORMATION. Thanks and best wishes!

socrateaser, Attorney
Category: Bankruptcy Law
Satisfied Customers: 33544
Experience: Attorney and Real Estate Broker -- Retired (mostly)
socrateaser and 5 other Bankruptcy Law Specialists are ready to help you
Customer: replied 1 year ago.

Thank you so much for your assistance. How do I find out who to serve for a corporation? The lender is Santander Consumer USA?

Expert:  socrateaser replied 1 year ago.
Click here.

NOTICE: My goal here is to entertain while educating the public about the law. I hope my answer is useful and informative to you. During our conversation, the website may ask you to rate my answer. If you rate my answer lower than the middle rating, then the website retains your entire payment, and I receive nothing. It is entirely your choice as to how you rate my answer. However, because your payment to me is in the nature of a donation/gift, rather than as compensation for any services rendered, you are entitled to know how your rating affects the final distribution of your donation.

If you need to contact me again, please put my user id at the beginning of your question ("To Socrateaser"), and the system will send me an alert. Please Click the following link for IMPORTANT LEGAL INFORMATION. Thanks and best wishes!

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