Carmax bought leased car then claimed there's $19K unpaid balance

[doanthaitu]

Jurisdiction

California

I want to express my gratitude in advance to anyone who will contribute their help.

I live in Southern California, Orange County.

This is my first time leasing a car and also my first experience with Carmax. I came to them because they advertise that they will make our buying/selling car experience much easier.

My lease was 3 years, but I sold it to them at year 2. They made me wait for 2 hours because they needed to contact Audi Financial to obtain payoff info. When I asked why it took so long they told me they need to verify by phone AND by fax.

When they done, they offer to by my car for $30,000 and the payoff was around $12,000 then they cut me a check for $18,000. I signed the contract, deposit the check, payoff my credit cards, get another car, pay personal loans....

They called me in about 2 weeks and told me they made a mistake and I now owe them $16,000. I was shocked, how can they made this kind of mistake? I mean both Carmax and Audi, this wasn't the first time they do transaction like this, and they did verify by phone and fax, how could this be? I took my car there because they advertise it will be easier, but this is too much hassle.

Now they sue me, I answer to the complain, show up for case management.. I just receive Request for Admission and Request for Production.

Request for Production:

1. Produce YOUR copy of the CONTRACT
2. Produce all DOCUMENTS relating to any payments made by YOU on the CONTRACT
3. Produce all DOCUMENTS between YOU and PLAINTIFF relating to CONTRACT between November 1, 2014 and the Present.
4. Produce all DOCUMENTS which evidences payments made to PLAINTIFF pursuant to the terms and conditions of CONTRACT.
5. Produce all DOCUMENTS that YOU relied, are relying, or will rely upon for YOUR Statue of Frauds Affirmative Defense as alleged in ANSWER TO COMPLAINT to PLAINTIFF'S COMPLAINT.
6. Produce all DOCUMENTS that YOU relied, are relying, or will rely upon for YOUR Unjust Enrichment Affirmative Defense as alleged in ANSWER TO COMPLAINT to PLAINTIFF'S COMPLAINT.

Request for ADMISSIONS:

1. ADMIT that you executed the CONTRACT.
2. ADMIT that YOU failed to make payment on the CONTRACT dated November 24, 2014.
3. ADMIT that YOU owe the amount of $16,000 on the CONTRACT as of January 15, 2015
4. ADMIT that the CONTRACT allows collection of attorneys fees and costs in the event of default of the CONTRACT.

Can someone please help me to answer these Requests?

I also would love to send them the same as to obtain Documents that they used to obtain the payoff amount from AUDI Financial, and their procedure of handling buying leased car so I can see how did they make this kind of mistake in the first place.


Please help. Thank you very much, I really appreciate your help.

 

[ElleMD]

No one here is going to be your lawyer for free. I suggest using the search feature at the top of the page to look for a lawyer in your area.

 

[army judge]

I suggest you speak with a lawyer.
There's just too much you need to know for me to help you over the internet.
These forums aren't intended to substitute for licensed attorneys.


Your issue is very complex, especially in California courts.

I will say, that based upon what you've recited above, you should have trouble beating Carmax in court.

I would simply deny each of these allegations, IF they aren't true.

1. ADMIT that you executed the CONTRACT.
2. ADMIT that YOU failed to make payment on the CONTRACT dated November 24, 2014.
3. ADMIT that YOU owe the amount of $16,000 on the CONTRACT as of January 15, 2015
4. ADMIT that the CONTRACT allows collection of attorneys fees and costs in the event of default of the CONTRACT.
To that end, make sure you don't default and miss a court date.

I don't think you fully understood what you signed.
You sold the car, but I don't think they meant they were giving you $30,000 for a used car.
Yes, they paid someone $12,000, but that check you got for $18,000 was PROBABLY a loan.

You can't walk away from a lease as easy as you thought.
That's how those companies make money, selling USED cars, and making loans.

 

[doanthaitu]

Thank you for your respond. I did consult the attorney, all they do for me was to send offer letter to Carmax to ask to reduce the payoff amount, and they charge me $1000 for that. Carmax refuse, and there goes $1000.

But is it in their nature of doing business to buy leased car by paying the customers with the different between the buying price and the payoff lease price then seek legal action against customers to recoup payoff value of vehicles every single time they buy leased cars? This is my question.

Second of all, I'm not trying to deny that I owe this money, I just want to say that this situation has put me in a very difficult position financially. I can lose this case, I want to work out a payment plan with them, which they refused when I hired an attorney to do so, so it's more affordable to me.

I am not trying to win this case, I just wonder why do I have to go through all this hassle bc of their mistake? How did they make that mistake in the first place? And even if I lose, I can still negotiate payment term with them. I am single mom and have been unemployed since giving birth to my daughter since I can't find anyone to take care of my daughter, so no income right now, I live by getting support from friends and family, I can't afford to pay $16K now.

Do we have any possible defenses?

Thank you for your respond.

 

[txls]

I don't understand how you would owe anything and I don't see how it would be a loan since you longer have the vehicle, but then we don't have any of your documents in front of us. It sounds to me like perhaps the "payoff" quote they asked for was a balance of payments which did not include the residual amount. Their mistake or Audi Financial's mistake. Your lawyer should explain to you why he/she tried to settle for a lesser amount. He/she must believe somehow that you owe them. Ask for an explanation. You may have signed something that stated "if your payoff amount is different then you owe the difference." I can't see them pursuing this in court and refusing a settlement unless they have a strong position to win.

 

[adjusterjack]

I am not trying to win this case, I just wonder why do I have to go through all this hassle bc of their mistake? How did they make that mistake in the first place? And even if I lose, I can still negotiate payment term with them. I am single mom and have been unemployed since giving birth to my daughter since I can't find anyone to take care of my daughter, so no income right now, I live by getting support from friends and family, I can't afford to pay $16K now.

All I can tell you is:

1 - You're in way over your head trying to handle this lawsuit by yourself and I can almost guarantee that you will lose, possibly by default if you don't respond, or just because you owe the money.

2 - Your contract likely has an attorney fee provision which means that the plaintiff is racking up attorney fees that will be added to your judgment. You already paid one lawyer $1000, imagine how painful it's going to be when the plaintiff's lawyer adds another $10,000 to your judgment for his fees.

3 - Being a single, unemployed Mom, you might seriously consider bankruptcy. If you are eligible for Ch 7, this whole thing goes away (along with any other debts you might have) for about $2000 or less.

 

[doanthaitu]

I don't understand how you would owe anything and I don't see how it would be a loan since you longer have the vehicle, but then we don't have any of your documents in front of us. It sounds to me like perhaps the "payoff" quote they asked for was a balance of payments which did not include the residual amount. Their mistake or Audi Financial's mistake. Your lawyer should explain to you why he/she tried to settle for a lesser amount. He/she must believe somehow that you owe them. Ask for an explanation. You may have signed something that stated "if your payoff amount is different then you owe the difference." I can't see them pursuing this in court and refusing a settlement unless they have a strong position to win.

Thank you very much for your respond. Please see the attached file for the terms, I know it's blurry, please bear with me.

 

[army judge]

Thank you very much for your respond. Please see the attached file for the terms, I know it's blurry, please bear with me.

It is as "txls" speculated, you AGREED to pay the difference in the payoff quote obtained and any difference.

Carmax paid out the lease, and there was more owed as "txls" speculated the "residual".

I suggest you file a "pre se" bankruptcy in Chapter 7.
The filing fee is about $255, and can be paid in installments.

You need two debtor education classes, those average about $10 to $25 each.

You can buy the forms to file online for about fifty bucks, or download them for free from the court's website.

I suggest BUYING the documents, as they come with explantions on how to fill out the forms.


As far as the Carmax lawsuit, you have no defense.

You owe the money, which is why the lawyer charged you a few bucks to try to settle.

Bankruptcy will set you FREE.
Good luck.

 

[doanthaitu]

It is as "txls" speculated, you AGREED to pay the difference in the payoff quote obtained and any difference.

Carmax paid out the lease, and there was more owed as "txls" speculated the "residual".

I suggets you file a "pre se" bankruptcy in Cha[ter 7.
The filing fee is about $255, and can be paid in installments.

You need two debtor education classes, those average about $10 to $25 each.

You can buy the forms to file online for about fifty bucks, or download them for free from the court's website.

I suggest BUYING the documents, as they come with explantions on how to fill out the forms.


As far as the Carmax lawsuit, you have no defense.

You owe the money, which is why the lawyer charged you a few bucks to try to settle.

Bankruptcy will set you FREE.
Good luck.

I try not to file bankruptcy over this case. I want to ask for your opinion about what kind of payment plan can usually agreed between both parties? I need to know what would they do if I can't afford to pay at this point?

 

[adjusterjack]

I try not to file bankruptcy over this case. I want to ask for your opinion about what kind of payment plan can usually agreed between both parties? I need to know what would they do if I can't afford to pay at this point?

A payment plan would be entirely up to the creditor. There's is no way to guess what would be available to you other than to say the creditor will always want more than you are willing or able to pay and will turn a deaf ear toward your offers.

As soon as the creditor gets a judgment and the appeal period passes the creditor will attempt to levy your bank account and garnish your wages.

Garnishing your wages will fail as long as you are unemployed but if you have any money in banks I suggest you close those accounts and live off the grid by using cash and money orders.

Make sure whoever is assisting you with money gives you cash instead of checks or you'll pay a fee to cash checks at check cashing places.

 

[doanthaitu]

wow, they're allow to levy my bank account? I didnot know that.

Thank you very much.

 

[army judge]

wow, they're allow to levy my bank account? I didnot know that.

Thank you very much.

They can also get a court order to attach your wages.
In essence they get paid before you do, like the government tax snatchers.

A civil judgment will harm your credit more than any bankruptcy.
A BK will set you FREE!!!

 

[Betty3]

You can discuss a possible lesser settlement amount & a payoff plan with the creditor & see if something can be agreed upon. Otherwise, you might want to consider bankruptcy as suggested.

 

[Disabled Vet]

Here is the steps that I would take.

1. Request why there is a high pay off?
2. Since you attempted to settle this thru a lawyer requesting a lower pay off. I go to court and explain to the judge that you are unable to make a huge amount. Bring documents showing that you applied the money towards your other bills.
3. Request that a payment plan be put into place. They will tack on interest to this amount as well.
4. I wouldn't keep much money in my saving/checking accounts. Some folks get a safe deposit box.
5. I would keep pressing Carfax for a settlement. Keep a copy of every letter you send to them.

I don't know jack about laws..... This is just the approach i would take.

 

[doanthaitu]

Thank you everyone for you help. I really appreciate it.