QUESTION
Can I file a lawsuit against my lender for payments made on a repossessed auto-loan?
Asked on Nov 14th, 2013 on Bankruptcy - Michigan
More details to this question:
In 2011 my vehicle was repossessed for lack of payments. The lender informed me that I could either pay the full amount of the loan or they would sell the vehicle. I obviously could not afford to pay off the loan so the car was sold. They then told me I am required to pay the deficiency balance. I have been making monthly payments for almost two years now. It was recently brought to my attention that in fact there may be no legal requirement for me to pay them! That would be great news, but I'm wondering if there’s any way to get back the payments I've made since they've sold the car.
2 ANSWERS
Debt Collection Attorney serving Chicago, IL
Partner at
Edelman, Combs, Latturner & Goodwin, LLC
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The answer depends on the reason there is "no legal requirement for me to pay them." Generally, you are required to pay a deficiency upon the sale of repossessed collateral. Under some circumstances, Illinois law may bar a deficiency, for example, if proper notice was not given or the sale was not commercially reasonable. However, Illinois law also generally provides that money paid under a claim of right cannot be recovered back absent fraud. So if that is the reason that there is "no legal requirement," then you probably cannot recover anything back. If the reason you don't have to repay is based on federal law, federal law does not follow that rule, but I can't think of any federal prohibition other than a bankruptcy discharge.
Answered on Nov 19th, 2013 at 3:20 AM
Appellate Attorney serving Grosse Pointe Farms, MI
at
Musilli Brennan Associates, PLLC
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I do not know where you are getting your law, generally you are totally liable for the deficiency.
Answered on Nov 19th, 2013 at 3:14 AM