JaySin

Statute of Limitation on Repo

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Hi everyone,

I sure hope that I'm posting this in the right place. I had some questions about credit reports, collections, and closed accounts.

So here's the thing:

 

Before my wife and I met, she had a car loan and then lost her job. The car was repossessed and then sold at an auction. The company wanted her to pay the difference between her loan and what the car was sold for. She still did not have work so it didn't go over well. Eventually she stopped receiving bills and contact of any kind. I'm trying to figure out what the statute of limitation for collections is (in NV it appears to be 6 years). From what I have read, after the statute of limitations, a collector can't sue you to collect on a debt?

 

When does the limitations start, according to what's on the credit report? Is it the date the original account was closed?

 

Also, if the company does try to go after her and take things away in order to collect, the can't take our current car that has both of our names on it, can they?

 

What are the odds that they will try to collect before the limitation runs out (by suing)? We have not heard from them since 2010. 

 

Please help. I'm concerned and have no idea what to do here.

 

If you need any additional info, please ask.

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SOLs only apply to legally pursuing debt (lawsuit), there is no statute of limitations on them asking you to pay (collections).

 

SOL usually begins to run from the last payment date and make sure you're looking at the statute for auto loans, in a lot of states, these are different than say, credit cards.

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From what I have read, after the statute of limitations, a collector can't sue you to collect on a debt?

 

Not exactly.  They can file the suit however if the SOL has truly expired then the consumer has an affirmative defense to the suit that the Plaintiff waited too long to file and the case should be dismissed.

 

When does the limitations start, according to what's on the credit report? Is it the date the original account was closed?

 

The date she defaulted on the first payment on the car note.  

 

Also, if the company does try to go after her and take things away in order to collect, the can't take our current car that has both of our names on it, can they?

 

If NV allows for the sale of assets to satisfy a judgment they can take property that is titled to her.  However, most creditors do not bother going after a vehicle because usually it is financed.  Even if it isn't financed there is a mandatory state exempted amount that the owner must get and by the time they pay towing, storage, auction fees, and the exempted amount there is usually nothing left towards the judgment making it not worth the expense unless the consumer owns a high end car with no liens.

 

What are the odds that they will try to collect before the limitation runs out (by suing)? We have not heard from them since 2010. 

 

If you haven't heard from them in 5 years probably slim to none but there is NO way to predict what a creditor will do.  Some do get active right before a SOL expires.  I would lay low until you are certain they can no longer sue and ensure she has a defense if they do sue.

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If you haven't heard from them in 5 years probably slim to none but there is NO way to predict what a creditor will do.  Some do get active right before a SOL expires.  I would lay low until you are certain they can no longer sue and ensure she has a defense if they do sue.

 

That's why I was asking how much the deficiency was. I know literally tons of people who've had cars repo'd but never known one to be sued over any deficiency. I guess if the amount was high enough they might. I was co-signer on a car that got repo'd in 2012. I got one call once asking for a $3000+ deficiency. I said I wanted to see the auction sales paperwork because I simply didn't believe the car went that cheap--even through auction. I never heard a peep out of them since, though it is on my CR marked profit/loss write off.

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I said I wanted to see the auction sales paperwork because I simply didn't believe the car went that cheap--even through auction. 

 

This is the principle reason most creditors don't attempt to seize an auto to pay off a judgment.  I have seen cars go for as little as a few hundred bucks at an auction.  It all depends on WHEN the car was sold.  During the recession crisis you could probably grab great cars for around a grand because there were plenty of them at the auctions which would drive prices/bids down.  When there are fewer cars being seized and auctioned then bids/prices go up due to limited supply.  There is no way for a creditor to predict how they will do therefore they typically don't see it as being worth the risk unless it is a high end auto that will fetch more than the cost of grabbing it.

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This is the principle reason most creditors don't attempt to seize an auto to pay off a judgment.  I have seen cars go for as little as a few hundred bucks at an auction.  It all depends on WHEN the car was sold.  During the recession crisis you could probably grab great cars for around a grand because there were plenty of them at the auctions which would drive prices/bids down.  When there are fewer cars being seized and auctioned then bids/prices go up due to limited supply.  There is no way for a creditor to predict how they will do therefore they typically don't see it as being worth the risk unless it is a high end auto that will fetch more than the cost of grabbing it.

 

Very true! In my co-sign case it was a $35k car that supposedly sold for $12k with $15k owing. I thought my request to see the sales docs was reasonable.

 

If a vehicle gets sold too cheaply wouldn't that raise the question of it being duly mitigated??

 

Back on topic... if they're only chasing OP for say $1k then it's probably not worth worrying about?

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What is the deficiency amount they have been asking for?

They want $11k on it. But again she hasn't heard anything, and her dad hasn't either (he was a co-signer). The technical term on the report says that the account is closed and was written/charged off. The collection agency account was where it went 5 yrs ago when she didn't pay. Neither the original or the collectors have contacted us. 

 

Wow, thank you for all the awesome feedback, guys. I didn't know about most of this stuff beforehand.

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Not specifically on the SOL question but it seems NV (and I believe many other states) have laws regarding auto repossessions and deficiency judgements.  Failure to meet all the strict requirements in NV might block collection of the deficiency.  I can't get the link to paste but try searching for "auto repo deficiency Nevada".

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Bankruptcy Attorney

  •  Henderson, NV
  •  NV licensed
Posted  on Jul 20, 2012

The above answer is correct - 6 years from the date of default. If it was repossessed seven years ago, and sold a few weeks after repossession (which is what is almost always done), if they have not yet filed a lawsuit against you, then they would not be able to do so. 
That does not mean, though, that they cannot continue to bother you with collections calls - it just means that they cannot threaten to sue you or 'take legal action' or 'go legal' or other threatening statements that they may make to try to collect. 
If they file a lawsuit against you, or if they threaten to take legal action, you may want to contact an attorney to make it clear to them that what they're doing is a violation of law.

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