My parents are in a bit of a dilemma

[TomTomTuning]

About 6 years ago my parents purchased a new car, a fairly expensive car. They decided to close there business, and to save money they decided to get rid of the car. I was only 16 at the time so its not like i knew any better or even that they did this.... But took the car straight back to the dealer (dont ask my why), the dealer sold the car for 7K less then what my parents owed to the bank.

My parents have been getting harassed by the collections more and more.. They recently called and said they could settle for X amount, or they would be taking them to court.

Should they settle or just wait till the negative clears from the Credit.

Or can they truly take them to court? Any advice would be appreciated.

[OMGWhatHaveIdone]

TTT,

Did the dealership ever give your parents anything in writing to show proof of what the car sold for? Did they try to pay off the difference? If so, when was the DOLP? Depending on when that was, the SOL may apply here. In PA, it's four years. That said, it won't prevent the CA's from trying to sue, but your parent's could bring up SOL as a defense in court if it ever gets that far.

As a side note, legally, their wages can not be garnished for this debt, as PA does not allow it. When was the first time they were contacted by the CA? If it's been within the 30 days, have your parent's DV right away.

Make sure your parent's have all of the paperwork related to this issue and don't let them throw away anything. They could also try contacting AG Tom Corbin's office to see what they can do. His office is in Harrisburg.

A CA does not have to be licensed in PA, but they do have to follow state law on unfair collections and trade practices here. Since we're a two party state, they can't record conversations unless the other party agrees to it. If the CA calls, and they do not inform your parents that the call is being recorded, then that's a violation. On the other hand, if your parents set up their answering machine with a message that states all inbound calls are recorded and the CA chooses to remain on the line, then your parents can always let the answering machine pick up the call and once your parent's know the CA is on the phone, you can leave the answering machine on so the conversation is recorded. That IS legal, as the CA had the option of hanging up after the message played.

PM me if you want, as I live in PA also and can try to find some statutes or information to help your parents out.

[TomTomTuning]

TTT,

Did the dealership ever give your parents anything in writing to show proof of what the car sold for? Did they try to pay off the difference? If so, when was the DOLP? Depending on when that was, the SOL may apply here. In PA, it's four years. That said, it won't prevent the CA's from trying to sue, but your parent's could bring up SOL as a defense in court if it ever gets that far.

As a side note, legally, their wages can not be garnished for this debt, as PA does not allow it. When was the first time they were contacted by the CA? If it's been within the 30 days, have your parent's DV right away.

Make sure your parent's have all of the paperwork related to this issue and don't let them throw away anything. They could also try contacting AG Tom Corbin's office to see what they can do. His office is in Harrisburg.

A CA does not have to be licensed in PA, but they do have to follow state law on unfair collections and trade practices here. Since we're a two party state, they can't record conversations unless the other party agrees to it. If the CA calls, and they do not inform your parents that the call is being recorded, then that's a violation. On the other hand, if your parents set up their answering machine with a message that states all inbound calls are recorded and the CA chooses to remain on the line, then your parents can always let the answering machine pick up the call and once your parent's know the CA is on the phone, you can leave the answering machine on so the conversation is recorded. That IS legal, as the CA had the option of hanging up after the message played.

PM me if you want, as I live in PA also and can try to find some statutes or information to help your parents out.

Aghh, i was hopping the wages could be garnished after time. But right now id hate for them to get sued or have to go to court. They understand that they were at fault when they returned the car (after i told them they were crazy for doing that).

I will have to ask if they got any paper work from the dealership showing proof of what the car was sold for. My parents have not attempted to pay off that difference, and for the most part kept away from the CA's.

So when would the SQL be? How can this benefit them? If they settled with the CA would that renew the date and effect there credit (i need to brush up on my Debt info lol)

Thanks so much!

[OMGWhatHaveIdone]

The SOL is four years and starts from either the Date of last payment (DOLP) OR the Date of First Delinquency (DOFD). This is why I asked you when the last payment was made. If they surrendered the car back to the dealership and they sold it, there may be some other avenues we could check into, such as whether or not the dealership sold it at a fair price. But I'd need to know more details. PM me if you want.

[TomTomTuning]

PM sent

[OMGWhatHaveIdone]

got it and responded

[Robert Nashville/Savannah]

Your parents effectively did a voluntary repossession - the only difference between a voluntary repossession and an involuntary one is that a recovery company doesn't have to go looking for and then tow the vehicle (which saves some fees). Other than that, what happens is the same.

I suspect the "dealer" did little or nothing in this except act as a reception point...whoever financed the vehicle would have dictated the process for disposing of the vehicle at auction, etc. and your parents, obviously, are still obligated for the deficiency.

If the SOL has passed then they have a good, affirmative defense to a lawsuit.

If the Finance company didn't follow their state law with regards to the repossession that may also be a way "out" for them if sued and/or give them recourse for a suit of their own.

If this is a junk debt buyer (rather than the original creditor) that too may work in their favor as JDBs generally don't have the evidence they need to prevail in court if they sue.

However, bear in mind that your parents can't stop the current creditor from filing suite nor can anybody guarantee your parents wold "win" even with a good defense.

As with any contact from a collector they have two primary avenues to take...

1. If they know the debt is out of statute and/or they have no intention of ever paying the debt, they can simply send the collector a cease communication order (C&D) letter.

2. If they aren't sure about the debt being out of statute and/or they may want to try and settle this then disputing the debt and requesting validation is probably their next step.

There is a ton of information on this site about both avenues so I won't go into detail here.

The two things they should not do is ignore this problem nor should they agree to do anything until they have properly vetted this collector.