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CalAttorney2, Attorney
Category: Business Law
Satisfied Customers: 10244
Experience:  I am a businesses law attorney, with experience advising and representing owners and investors.
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I purchased a car 03/06/15. I traded another vehicle in and

Customer Question

I purchased a car 03/06/15. I traded another vehicle in and put $7500 on my american express. The purchase contract states that also. Now i go to work end of november and boss hands me small claims paperwork and tells me im being sued in small claims by the auto dealer. They spelt my name wrong and never mailed a copy to my work address for a proper substituted service. On their paperwork they said theyre suing for $5000 and they say fraud that i gave them a credit card that was no good. My question is what is the best way to respond to all. They said in purchase contract they recieved down payment in full and i never heard anything prior. Plus they didnt properly serve me and court is monday. Is there a presumption with them stating they recieved down payment in full on 03/06/15 and releasing vehicle, or something with bank n lending laws (they set me up with my new car loan) i can cite. What angle or response should i take? Should i file some sort of counter claim?
Submitted: 1 year ago.
Category: Business Law
Expert:  CalAttorney2 replied 1 year ago.

Dear Customer,

I am sorry to learn about this situation.

Start with first things first: If you have a court hearing on Monday - make sure you go. If you don't appear they will get a "default judgment" against you for the full amount they are asking for. You can contest this later based on improper service, but you are going to start with a position of having a judgment entered against you!

If you want more time, ask the judge for more time to prepare a defense when you appear on Monday. With bad service, the judge should give you additional time to prepare a defense (be prepared to go forward on Monday just in case they don't but most judges will give you additional time if the service is faulty).

For help in how to defend a small claims action - use the CA Courts self help site (it is actually very good):

As far as the claim itself - did your credit card payment go through? (You don't say in your post whether or not there was a problem with your credit card, if your payment didn't go through, you need to make arrangements to ensure that the dealership gets paid - you can dispute that they failed to give you notice (both before they filed suit and with improper service of process), but you are still going to have to make the necessary payment simply documenting that an attempt to run a credit card does not waive a merchant's right to payment).

Most of these claims do end up getting pushed to mediation (even if you get more time from the judge, be prepared to go to mediation with the dealer). In mediation, if you haven't paid (if there was a problem with your card), be prepared to come up with a reasonable payment plan to quickly get the dealer their money.

When trying to settle a debt, creditors generally prefer lump sums over payment plans. They are often willing to accept an amount less than the full debt (the trade off is that they get a quick payment and don't have to worry about ongoing collection costs or administration). If you do not have the ability to offer a lump sum for something the creditor will accept (some will accept a small portion, while others want close to the full amount), you can try a payment plan, these are less satisfactory to the creditor (especially if they have a lien on your property already), but if you are willing to offer something with a reasonable chance to get the creditor a large amount of their debt back, you are likely to get them to accept it.

Whenever working with a creditor, make sure that you keep your communications in writing (if you speak to someone by phone, promptly send a confirmation letter to summarize your conversation), as this will help to ensure that there is no confusion later on, and you will be able to enforce your settlement against any future collection efforts.

Customer: replied 1 year ago.
But i have my credit card statement showing the charge from dealer. My statement doesnt show me paying my credit card though. And how is it fraud if its my credit card? How can they say i predented a card thats no good? Im in california
Expert:  CalAttorney2 replied 1 year ago.

I understand you are in CA (the link I provided you with above is as well).

Did your credit card make the payment on your behalf (that is the important thing).

I don't mean to be frustrating, but I want to ensure I understand your situation correctly (as it will help you better address the issue with the court).

-Either your credit card paid the dealer the full amount you charged on your card, or it did not.

-The amount shown on a credit card statement, or billed on your account balance, is not necessarily dispositive

(Sometimes this forum can be difficult as communications via "chat" do not allow for complete understanding, but the way you are phrasing your question and your follow up it appears that you are trying to say that you have documents that make it "look" like you paid using your card - but are leaving out whether or not your credit card carrier actually paid the money (the critical element)).

Customer: replied 1 year ago.
Is my credit card statement not enough proof
Expert:  CalAttorney2 replied 1 year ago.

Dear customer,

Did your card company pay, or not?

We see a lot of this type of question when the card holder disputes charges, cancels the card, or has insufficient credit to cover the charge - the account may show an attempt to charge the amount in question, but the merchant never received the funds. As you may assume, if you are the merchant a credit card statement is not the same as actually receiving cash in hand.

I am not saying that you are doing this (I still don't know what is going on in your matter, and we can only offer general information here), but if you are trying to play games with the merchant and the court (i.e. you never actually made the payment for whatever reason) the court is going to have very little patience.

If you did actually make payment (i.e. you charged to your credit card, they paid, and you either paid it off, or are still making payments on it), then you and I probably wouldn't be having this exchange - but you can introduce your credit card records to show this and the case should be dismissed.