Vehicle Repossession Vehicle repossession

[Ringwood]

Jurisdiction

Florida

My mother-in-law is 75 years old and lived in Florida up until 1 year ago. At that point she was diagnosed with terminal cancer and needed to move back home to Massachusetts for treatment.

She had a loan on a vehicle with an outstanding balance of approximately $18,000. The bank repossessed the vehicle a year ago when she moved. She is now getting a statement from the bank saying she owes $8,000 for the remaining balance on the vehicle. She has no assets, house, car, etc.

Her only income is $382 a month from a pension and $2,032 from Social Security.
Her only other asset is a IRA with about $14,000 in it, which supplements her monthly income.

Is there any action the Creditor can take to recover this $8,000 from her? What reply should we give the Creditor regarding these demands for $8,000?

Thanks.

 

[army judge]

Is there any action the Creditor can take to recover this $8,000 from her? What reply should we give the Creditor regarding these demands for $8,000?

First and foremost, please accept my best wishes for your loved one as she endures the latest trial in her life.

No one can ever guarantee what anyone else could be able to accomplish, even if it were prohibited.

Legally, a creditor shouldn't be able to levy against her pensions, specifically social security.

I suggest you forget about any financial shenanigans and focus your efforts on easing your loved one's life as she wages war against her medical maladies.

I wish you and your family all the best, and your aunt a speedy recovery, despite her current prognosis.

 

[mightymoose]

The creditor may not know the circumstances. It would not hurt to reply with a letter citing mom's age and condition, but don't say anything about assets. It might be enough to get them to let it go. It doesn't hurt to try.
Otherwise, letters are meaningless and you have no obligation to even open them. Unless served with a legal summons you could disregard this, at least for now.

 

[adjusterjack]

Is there any action the Creditor can take to recover this $8,000 from her?

She may be judgment proof with regard to a lawsuit but if she has a checking or savings account with the same bank as she had the car loan her money is at risk because of the bank's "right of set off" which is built into loan contracts and customer account agreements. A "right of set off" allows a bank to dip into any other account (without notice) to pay a delinquent account. There is no protection for any of the money because the "right of set off" is a contractual provision where the account holder or borrower expressly gave the bank consent to do this.

If she does happen to have her savings or checking in the same bank she needs to get her money out and close the account right now.

If she doesn't then she is free to ignore the letter from the bank or respond. Up to her/you to decide. There is no advantage to either. The bank will pursue or not pursue.

 

[Ringwood]

Thanks all for your advice and kind words.

I feel contacting the creditor would probably be prudent. My thoughts were just to have her outline her age and medical condition and state she is on a limited income and unable to pay this bill.

What is the reasoning for not mentioning that she has no assets? I would assume that if they were to pursue this, that information would come out anyway.

Thanks again for your help and advice.

 

[Ringwood]

adjusterjack,

She does have an account in the same bank, however it is fairly small and only has funds in it that were from her social security and pension. It is used just to pay bills online. I was under the belief that as long as the money in her account we're from these sources, then they could not be touched.

Thanks.

 

[army judge]

Thanks all for your advice and kind words.

I feel contacting the creditor would probably be prudent. My thoughts were just to have her outline her age and medical condition and state she is on a limited income and unable to pay this bill.

What is the reasoning for not mentioning that she has no assets? I would assume that if they were to pursue this, that information would come out anyway.

Thanks again for your help and advice.

Contacting the creditor will only pique their interest in your loved one.

As suggested, ignore their letters.

Do, however, address all correspondence issued by a court of law.

The distinction is very easy to notice.

 

[adjusterjack]

She does have an account in the same bank, however it is fairly small and only has funds in it that were from her social security and pension. It is used just to pay bills online. I was under the belief that as long as the money in her account we're from these sources, then they could not be touched.

Wrong. A "right of set off" bypasses any other laws that protects funds because the account holder has consented to the "right of set off." Let me emphasize that the customer gives the bank the right to do this by accepting the loan and/or the account holder agreement. You wrote that she gets about $2400 per month in SS and pension. This is not a small amount and could be quite painful if the bank snags that money. Once that happens there will be no getting it back and checks will bounce all over the place. I suggest she open an account in another bank (not just another branch) and get those direct deposits switched over ASAP.

The following is from my own checking account agreement:

"Right of Setoff
We may take or setoff funds in any or all of your accounts with us and with our affiliates for direct, indirect and acquired obligations that you owe us, regardless of the source of funds in an account."

There's more, but that'll show you what to look for in your own checking account agreement or your mother-in-law's.

What is the reasoning for not mentioning that she has no assets?

Because, as soon as you mention assets - one way or the other, what comes back is another letter demanding to know what those assets are and you end up going round and round.

Every time you engage a collector with an "open ended" reply, it just encourages the collector to bother you again.

If you are going to reply at all a simple "Sorry, can't pay, don't contact me again" will suffice. Otherwise, ignore it.

People make more trouble for themselves when they can't resist the urge to explain themselves.

Get that bank account taken care of before you get an unpleasant surprise.