In Massachusetts if a person falls behind in his/her car payments, the car lender can not just take the car. However, after your son's loan was 30 days past due a lender can decide to repossess the car (this can also happen if he fail to keep the car insured). A lender must send a notice called the "Rights of Defaulting Buyer under the Massachusetts Motor Vehicle Installment Sales Act" giving your son 21 days to cure the default.
After a repossession, the creditor must send your son a certified letter outlining his options to buy back the vehicle directly from the creditor or at the creditor's future
auction. He may bid on the vehicle at auction or pay the creditor the full amount of the loan, plus repossession charges. He has 20 business days to make arrangements to redeem the car or the creditor may sell the vehicle to another party at auction.
If you son did not redeem his repossessed vehicle, the creditor may sell it to recoup its losses. If the vehicle sells for more than your son owed, he would have been given any surplus amount, minus any repossession charges. If the car sells for less than he owed, he will still owe the remaining amount plus the repossession charges, which is known as a deficiency. However, Massachusetts law states the creditor cannot bill for the deficiency unless it exceeds $2,000.
UNFORTUNATELY, BECAUSE YOU AND YOUR HUSBAND ARE CO-SIGNORS ON THE LOAN, THE CREDITOR/LENDER CAN COME AFTER YOU FOR THE DEFICIENCY, AS WELL AS IT CAN COME AFTER YOUR SON.
My guess is that your son has no money and that is why he defaulted on the loan. Moreover, (and this is purely a guess), your son did NOT tell you about being behind on his payments.
The attorney is now sending YOU the letter, because although the creditor/lender can sue your son to recoup its losses, because you co-signed the loan, it can also sue you as well. Because you co-signed on the loan, you will be held 100% responsible for any "deficiency" if your son doesn't pay. Moreover, your credit rating may very well be affected because of the "default" on the loan, and any deficiency judgment that may be entered against you if you are sued in court.
It is VERY doubtful that you would be released from any deficiency or any lawsuit that is filed to collect the deficiency. Unfortunately, again, you co-signed the loan, and are therefore, 100% responsible. And, if your son has no money, the lender/creditor will come after you because it believes that you have "deep pockets" since you co-signed the loan for your son.
Your only relief would come from suing your son for your "out of pocket" monies with respect to the repossession and deficiency.
You may SERIOUSLY consider contacting an attorney who specializes in debtor/creditor law in your area. You can discuss the specific facts of your case, whether you received any notices of the default, evaluate your options and decide how to proceed.
Below is a link to the Massachusetts Bar Association Attorney Referral Page. You can call the Association and seek a referral to a qualified attorney in your area. Sometimes, an initial consultation is free or at a minimal charge. It may be VERY well worth your time and any minimal cost to do so as to determine any defense that you may possibly have, and the best way to try and negotiate a lower settlement than that demanded by the creditor/lender.
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***Answers given are for informational purposes only and are not meant to replace the advice or assistance of an attorney licensed to practice law in your state. If you need any more information, please do not hesitate to ask. Thank you!