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Zachary
Zachary, Attorney
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Experience:  Lead trial/International commercial attorney licensed 11 yrs
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Can you explain CA Civil Code 1542? My creditor repossessed

Resolved Question:

Can you explain CA Civil Code 1542? My creditor repossessed my vehicle while I was in active duty military. They were in violation of SCRA, and now they sent me a letter for a fix amount acknowledging the violation. If I sign this and sent it out, what will happen to the loan? Does this means the loan is settled?
Submitted: 1 year ago.
Category: Legal
Expert:  Zachary replied 1 year ago.
Hi,

Thank you for your question.

Your information states that you are in Texas. Is this were the vehicle was repossessed while you were on duty?
Customer: replied 1 year ago.


Yes, the car was repossessed in Texas, but the loan was originated in CA before entering military service.


 

Expert:  Zachary replied 1 year ago.
Got it.

CA Civil Code 1542 states that " A general release does not extend to claims which the creditor does not know or suspect to exist in his or her favor at the time of executing the release, which if known by him or her must have materially affected his or her settlement with the debtor." This simply means that when you are settling with a person for X, they cannot have you sign a general release which says you release them for everything if they have also done Y, and you would not release them for the settling amount if you knew they had also done Y. It keeps a settling party from defrauding you in a settlement.

The Servicemembers Civil Relief Act (SCRA) provides that if they want to keep the repossessed vehicle, they will need to terminate the amount you owe and pay you back what you have paid in installments. Is this what they're settlement offer is offering you?
Customer: replied 1 year ago.

The offer amount is $10,000 and taking negative items out in my credit report. The car was repossessed back in 2009, I don't think I'm getting that back. However, there is no mention in the letter about the loan balance.


 


In my understanding, if I sign the release, I get $10,000 but will not be able to sue them in the future for the SCRA violation. This prevents a lawsuit against them in the future.


 


Is it safe to say that they will terminate loan balance?


 


 


 


 


 


 

Expert:  Zachary replied 1 year ago.
No. That should be directly stated in the settlement agreement.

Are you able to scan it?

If so, scan as a PDF and send it toXXX@XXXXXX.XXX
In the re: line put - attn: zdnlaw re: http://www.justanswer.com/law/7wj09-explain-ca-civil-code-1542-creditor-repossessed.html

I'd like to take a look at it.

Do you recall how much you owed on it before the repossession?

Also, how much had you actually paid on it?
Expert:  Zachary replied 1 year ago.
I've received the document and have reviewed it. It does not state that the loan will be cancelled, but it does state that they will take the repossession off your credit report (which implies that the loan will be cancelled).

I think you should contact BoA to make a direct inquiry whether they will also be releasing you from further obligation under the loan and ask them to put that in writing.

Please let me know if you have any further questions. Please also kindly consider rating my answer positively so that I am compensated by the website for my work on your question. Rating positively does not cause an additional charge and does not prevent us from further discussing your questions.

Best Regards,
ZDN
Zachary, Attorney
Category: Legal
Satisfied Customers: 3921
Experience: Lead trial/International commercial attorney licensed 11 yrs
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