I need help with a reposession (during divorce) collection question

[ShannonG]

Hi everyone. I'm going to apologize in advance for the novel I'm about to pour out to you.

I'm a long time lurker who used to post here way, waaay back when (I can't even remember my old user name it's been so long ago!) and the advice I got here back then was fantastic, thanks again to everyone who offers advice here, it's really a generous thing you do to help others.

Back then I took an old, battered credit score of about 515 up to my current FICO of around 720. Since then I have divorced the weenie who helped ruin my credit and I am better financial shape than I have ever been in my life, but I see a problem on the horizon and I am turning to you guys for some advice on how to best tackle it.

When I filed for seperation from my ex husband in February 2004 (He was/is an alcoholic who was cheating on me and he was mentaly, physically and emotionally abusive and I was the only person in the relationship with a job...we're takling about a real, Grade A jerkface here.) anyway he moved out and took a vehicle that we had taken a loan out on together. Apparently, because I had the job and a better credit score, I was told by the finance company that I was the primary borrower on the vehicle. Up to this point I didn't even know that in a loan with two people on it, one of the people is the primary borrower...?

Anyway, he took the vehicle with him in February 2004 and neglected to make a single payment on it for 4 months and I was sick of seeing all these non-payments hit my credit report so I called the finance company (Americredit) and told them where the vehicle was and they went and got it in May 2004. I knew a repossession was bad for my credit, but I figured that almost 5 months of non-payments couldn't be much worse.

Well they sold it at auction and in the divorce (August 2004) the loan debt was assigned to him. In addition to the debt being assigned to him, he signed and had notarized a letter in May 2004 saying that he would take full financial responsibility for the loan and that I should be released from any responsibility for the debt. (I'm not sure if that document is worth the paper it's printed on, but I figured it can't hurt, right?)

I didn't hear another word about this debt until just this spring.

I got a letter from a collection agency (Plaza Associates in NY) in April 2008 asking me if I'd like to settle the debt and I sent them a DV letter, via USPS CMRR, the next week and they didn't reply to me until this August. They sent me photocopies of all the original loan documents, the notice to auction the vehicle, the notice of the right to redeem, an auction receipt, a deficiency calculation worksheet and a payment history. I haven't replied to them yet.

I know that the divorce decree assigning the debt to him doesn't trump the original loan, but is there anyway for me to fight this and avoid being sued by these guys for my ex's vehicle?

I wouldn't be so sick to my stomach over it if I had an extra dollar to spare (I just don't) and if he'd been anything resembling nice to me but he's been awful and vindictive and cruel. He hasn't paid a dime in child support to me in over 3 years (he owes me almost $10,000 in back CS) and he has told our 12 year old daughter that he thinks it's pretty funny that I'm being hounded for his debt. This man needs to be held accountable for his actions for once in his life and I am so stressed out it isn't even funny.

How do you guys suggest I approach this fight? I've heard something on here in searches related to my situation about using my State's Uniform Commercial Code statues, but honestly this is a new approach to me and I don't have the foggiest idea if it applies to me or where to even begin. Can someone with some experience in this please let me know if you have any suggestions or tips or even a letter template that you suggest I should use to reply to the CA?

Thanks in advance for any responses. I am really very grateful!

[looksbothways]

You have to look at this as two separate issues.

First, the car debt is yours to resolve since your ex is not paying, and yes it's unfair. They could sue you and win a judgment with little problem with the paperwork you state they provided you. The divorce decree and notarized letter will not matter in a lawsuit between the creditor and you. Think of it this way. If you loaned money to Jill and Jill later convinced Bob to pay the loan on her behalf, but he never paid, you would continue to expect Jill to make the payments since she's the one you loaned the money to in the first place. Her agreement with Bob doesn't negate the agreement between you and Jill. By the same token, your agreement with your ex as written through the domestic court does not negate your financial commitment to the car dealer. I strongly recommend dealing with this head on, making even a minimal payment arrangement if possible.

That doesn't mean your ex is off the hook, though. You can sue him for the money you pay out and you would win handily since you have both the divorce agreement and a notarized agreement from him. You can also file a motion of contempt with the domestic court since he is not holding up his end of the agreement. Whether it would be productive or not, considering the money he hasn't paid in child support, is anyone's guess.

I wish you the best of luck in getting what's owed to you. I know first hand what it's like to deal with someone who thinks it's perfectly fine to leave someone else holding the bill(s) for everything.

I'm currently owed quite a bit myself in things that my ex is supposed to pay half of, but doesn't. I'm filing the motion of contempt at the first of the year, since I've established a pattern of failure to comply on his part, but I don't honestly expect him to ever pay a dime. He's a pro at avoiding his debts. He owes thousands in back child support for the child he fathered with another woman (while we were married), another few thousand in student loans he's defaulted on, a couple of judgments for debts, and court sanctions for a frivolous lawsuit he was a part of. He just doesn't work in any legitimate sense. He either works under the table or his family picks up his bills.

[ShannonG]

You have to look at this as two separate issues.

First, the car debt is yours to resolve since your ex is not paying, and yes it's unfair. They could sue you and win a judgment with little problem with the paperwork you state they provided you. The divorce decree and notarized letter will not matter in a lawsuit between the creditor and you. Think of it this way. If you loaned money to Jill and Jill later convinced Bob to pay the loan on her behalf, but he never paid, you would continue to expect Jill to make the payments since she's the one you loaned the money to in the first place. Her agreement with Bob doesn't negate the agreement between you and Jill. By the same token, your agreement with your ex as written through the domestic court does not negate your financial commitment to the car dealer. I strongly recommend dealing with this head on, making even a minimal payment arrangement if possible.

That doesn't mean your ex is off the hook, though. You can sue him for the money you pay out and you would win handily since you have both the divorce agreement and a notarized agreement from him. You can also file a motion of contempt with the domestic court since he is not holding up his end of the agreement. Whether it would be productive or not, considering the money he hasn't paid in child support, is anyone's guess.

I wish you the best of luck in getting what's owed to you. I know first hand what it's like to deal with someone who thinks it's perfectly fine to leave someone else holding the bill(s) for everything.

I'm currently owed quite a bit myself in things that my ex is supposed to pay half of, but doesn't. I'm filing the motion of contempt at the first of the year, since I've established a pattern of failure to comply on his part, but I don't honestly expect him to ever pay a dime. He's a pro at avoiding his debts. He owes thousands in back child support for the child he fathered with another woman (while we were married), another few thousand in student loans he's defaulted on, a couple of judgments for debts, and court sanctions for a frivolous lawsuit he was a part of. He just doesn't work in any legitimate sense. He either works under the table or his family picks up his bills.

Thanks. I was fairly certain that I wasn't absolved of the debt just because of the divorce decree assigning it to him, but I thought I'd throw that out there and see if anyone thought what a judge might say in regards to the matter if I do end up in court over this?

Also, I have a question about your suggestion of arranging a minimal payment arrangement with them. Won't making payments re-age the debt on my credit reports for seven more years?

[looksbothways]

Well, you could try to investigate whether it's outside the SOL before making payments. According to http://www.fair-debt-collection.com/SOL-by-State.html#4

"Breach of any contract for the sale of goods covered by the UCC: 4 years, (A.C.A. 4-2- 725)"

I believe that covers a car loan, but I'm not near knowledgeable enough with regards to repossessions to tell you it's for sure outside the SOL for a lawsuit, nor do I know when the SOL starts to toll on it. Hopefully someone can give you better advice on that part.

[ShannonG]

Well, you could try to investigate whether it's outside the SOL before making payments. According to http://www.fair-debt-collection.com/SOL-by-State.html#4

"Breach of any contract for the sale of goods covered by the UCC: 4 years, (A.C.A. 4-2- 725)"

I believe that covers a car loan, but I'm not near knowledgeable enough with regards to repossessions to tell you it's for sure outside the SOL for a lawsuit, nor do I know when the SOL starts to toll on it. Hopefully someone can give you better advice on that part.

Awesome! Thanks for the link.

[LUEser]

I can only chime in here with limited knowledge.

You're right the divorce decree doesn't absolve you from the original debt.

But it does entitle you to any expenses you incur in paying it off, and since he's the liable party per the decree, then, I'd say you get a judgment against him, for his liability, and make his sorry a$$ repay you for what you had to pay out of pocket for this debt (assuming you have to pay).

[BTO429]

I hate this type of thing, it makes the fathers like me that fought for custody for ten years and finally got custody, a bad rep. Its those that do not pay CS that makes the courts think we are all dead beats.

I would file a motion in court to have him held in contempt as he did not follow through with his end of the court order. Remember him paying the car loan was an order of the court as in such is enforceable. Take it to the same court where you got the divorce.

I do not know how it is where you live but in my state the one that is owed CS can attach liens to anything tangible that the other person has. If he buys a house or a new car you can attach a lien and that lien would have to be paid before he can plate the car, or have a clear deed on the house. You can also do a wage assessment if he has a job. The CS will come right out of his paycheck every week, and its not his choice on the assessment, it can be court ordered.

[ShannonG]

I hate this type of thing, it makes the fathers like me that fought for custody for ten years and finally got custody, a bad rep. Its those that do not pay CS that makes the courts think we are all dead beats.

I would file a motion in court to have him held in contempt as he did not follow through with his end of the court order. Remember him paying the car loan was an order of the court as in such is enforceable. Take it to the same court where you got the divorce.

I do not know how it is where you live but in my state the one that is owed CS can attach liens to anything tangible that the other person has. If he buys a house or a new car you can attach a lien and that lien would have to be paid before he can plate the car, or have a clear deed on the house. You can also do a wage assessment if he has a job. The CS will come right out of his paycheck every week, and its not his choice on the assessment, it can be court ordered.

Thanks. Unfortunately he has no assets to speak of (a beat up used car and an apartment) and works jobs for just a month or two at a time so getting the slow-moving wheels in action with the Arizona Family Courts to have his wages garnished is really a futile exercise. At this point I think I'd be better off having his arrested for his past due CS.

Anyway, thanks for the contempt of court suggestion. I just may look into that more closely.