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Law Educator, Esq.
Law Educator, Esq., Lawyer
Category: Consumer Protection Law
Satisfied Customers: 118635
Experience:  Attorney experienced in commercial litigation.
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I had a title loan on my car. But then the department of public

Customer Question

I had a title loan on my car. But then the department of public safety in Texas sent me a clean lien free title. Having received the title, I thought everything is fine and the car was mine again.(did not read the terms of the loan) . I was making my payments on the loan perfectly fine until I lost my job. The loan is 4 months past due now. I received another letter from the department of public safety saying that the title that was sent was sent in error and no longer valid. However I had sold the car a while back! Then I got a repo notice from the lending co.i called them and made arrangements to make payments and agreed on 300 a month. However as of today I am not able to make the payments. What happens now as far as the legal procedures
Submitted: 2 years ago.
Category: Consumer Protection Law
Expert:  Law Educator, Esq. replied 2 years ago.
Thank you for your question. I look forward to working with you to provide you the information you are seeking for educational purposes only.
Texas is one of the few states that has a law that makes it a criminal offense to interfere with secured property. This means in selling or concealing a vehicle that is subject to a loan and being sought for repossession you committed a criminal offense IF THE LENDER CHOOSES TO FILE CRIMINAL CHARGES against you.
However, the lender will sue you for damages and obtain a judgment and seek seizure of your property and this type of judgment is considered not to be able to be extinguished in bankruptcy because it was considered fraud when you sold it without the lien holder being notified.
Also, the party you sold the car could have a claim against you as well BECAUSE the Texas DPS has rescinded or revoked the title, which means you could not have legally sold the car. This means that the lender can also pursue the buyer of the car and the buyer of the car, who will have their title canceled can also sue you for the breach of the implied warranty of merchantability (because you sold the car without good title) and you can be liable to return the money to the buyer as well.
So as you can see what can happen here can be a legal nightmare for you.
You are liable to the lender and the lender can pursue possible criminal charges as well as get a judgment against you. Also, DPS can cancel the registration/plates on the car for the person who bought it from you, and if they do, then the buyer also has a civil suit against you for the money they paid for the car.
Customer: replied 2 years ago.
Sonin this case, dps sending me a clean title doesnt mean anything?
Expert:  Law Educator, Esq. replied 2 years ago.
Thank you for your reply.
As you knew you had the title loan, them making the mistake of sending you the clear title, it is not much protection from liability. You remain liable I am afraid.