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I am currently in default on my truck loan. The loan has

been charged off. ( in...
I am currently in default on my truck loan. The loan has been charged off. ( in January 2017) The truck was impounded out of state. (third party had it) I informed the bank where the truck was located and they inspected it. The bank said it was not worth them recovering. My question is the bank has offered me a settlement amount. My credit is already trashed and I am won't be able to pay the settlement amount. What happens now?
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Answered in 5 minutes by:
6/4/2017
Gerald, Esq
Gerald, Esq, Lawyer
Category: Legal
Satisfied Customers: 4,312
Experience: 30 years of experience
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Hello,
Thank you for using Just Answer. Please bear with me while I review your question. I will respond fully shortly. Thank you for your patience.

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Hello,

Thank you for your patience and thank you for using Just Answer. I want to provide you the best service I can. Please feel free to ask any follow-up questions you have.

I am an attorney with 30 years of experience; I hope to provide you information that will help you in resolving your question.

If you do not accept the settlement amount the lender will do one of a couple of things:

1) They will sue you to obtain a judgment against you and then try to enforce the judgment by attaching or garnishing your assets.

2) More likely - They will sell your loan to a collection agency who will contact you and try to get you to make payments. When that fails they will sue you to obtain a judgment and try to enforce the judgment by attaching or garnishing your assets.

If you truly have no assets and your income is limited they will not be able to enforce the judgment. If you have some asset, but not enough to pay off the debt you may consider bankruptcy.

Ultimately if they can not enforce the judgment they will write it off and cancel the debt. But when they do that they will report the debt cancellation to the IRS. At that time you will get a 1099-C. The IRS treats the cancelled debt as income.

All of this will take years to resolve with the lender or collection agency. And you should keep in mind that the debt may be sold multiple times so that you will deal with multiple collection agencies. BUT if you can not pay you can tell each of them to stop contacting you and they must stop contacting you. They can sue you BUT they are not allowed to harass you.

I hope the information I provide is useful to you. I want you to be comfortable and satisfied with my attempt to assist you. Please, if you have ANY follow-up questions, feel free to ask.

If you ask a follow-up question and I do not respond immediately, it is because I am temporarily unavailable. I promise to respond as soon as I return. Please note that I am often unavailable Friday evening through Sunday.

Please do not forget to give me a positive rating. It adds nothing to your costs but helps me greatly. Thank you.

If you are dissatisfied with my response, PLEASE let me know before giving me a negative review so that I may try to be of better assistance. Or, if you prefer, let me know and I can “Opt Out” and your question can be re-posted without additional cost to you. I will be fair to you, and only ask the same from you.

Good luck.

Please note: Information is educational and not given as legal advice. Only your local attorney can give legal advice. I can't establish or accept an attorney-client relationship with you. All posts are available for public viewing.

Kind regards,

Gerald

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Customer reply replied 5 months ago
Damn. Ok . I have another question related to the same vehicle. The third party who had the vehicle when it broke down and was impounded in another state. Obtained a bill of sale for the vehicle using "trickery " per the sheriffs office, they have used this bill of sale to keep me from being able to file theft charges against them. These people are professional cons and have several other criminal cases against them. Who is responsible for the impound bill? They were driving it and tried to get the truck back using that bill of sale (it had the wrong plates on it) so police would not release it to them because of the plate issue.

if the third party had your vehicle thye would be responsible to you for the impound fees. But the impound lot will not release the vehicle to you unless the fees are paid. This gets to be a bit of a mess because you would have to sue the third party to get the fees back.

As for the debt, I had to give you the short cut version. Without knowing you specific situation it is difficult to address all the possible variables. You do have protections on the debt collection. So if they are harassing you you can file a complaint with the FTC.

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Customer reply replied 5 months ago
The vehicle is trashed not worth the impound fees. What is the likely outcome with the impound lot?

Generally the impound lots do NOT sue over fees. It is a costly and low percentage process for them to pursue.

They will obtain a storage lien against the truck and then sell it for scrap.

They may send you threatening notices and letters but they likely will do nothing more beyond that.

Gerald, Esq
Gerald, Esq, Lawyer
Category: Legal
Satisfied Customers: 4,312
Experience: 30 years of experience
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Customer reply replied 5 months ago
Thank you for your help.
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