I recieved a civil summons from a local bank in my area reguarding a loan I had on a truck I purchased 11 years ago. I fell 2 payments behin...

Question

I recieved a civil summons from a local bank in my area reguarding a loan I had on a truck I purchased 11 years ago. I fell 2 payments behind and the bank repoed the truck. I was able to work up the money to catch up my payments but the bank would not accept my payment and that I would need to pay the full balance of the truck. Being unable to do that ,they sold the truck I assumed the loan was taken care of when the truck was sold. Now, I have recieved a civil summons letter stating I owe 10,000.00 to the bank,the balance was 5,000.00 when it was repoed and sold. Thank you for any advice.

Answer

You bought your truck 11 years ago and you still had a vehicle loan? What kind of vehicle was this? A semi?

My focus is on consumer transactions not commercial. If this was for a tractor trailer, it might be wise for you to consult a local attorney. Even if this is consumer loan, you may have some defenses which have to be raised in a proper answer. Answers have to be filed within 30 days after you receive the summons and complaint.

If you have no defenses to the action and if money is tight, you may want to consider spending your money on a bankruptcy attorney instead. I don't know what assets and debts you have, but you want to see whether you qualify for a chapter 7 or 13. Of course, it would depend on whether this is your only debt and your other circumstances.

You don't ask any questions really. I would need to see the loan paperwork, but the lender may have the right to "accelerate" the debt and demand the entire unpaid balance, not just the past due amount. If this is the case, the lender does not have to accept what you offered and your options would have been to refinance the vehicle or file bankruptcy if you wanted to keep the vehicle.

The vehicle was evidently not redeemed and it was sold. Usually the vehicles are sold at an auto auction and bring in a lot less than the balance. I also don't know how long it has been since the sale and demand for money. The loan agreement may have allowed the lender to charge pre-judgment interest and it is conceivable that if you did not pay, that the balance grew from $5000 to $10,000 again.

As an alernative to bankruptcy, have you tried to contact the lender and see if they will settle? Most debts settle for between 50% and 80%. If you do not have the funds, I am not a fan of making payments unless you have assets that can be seized. If you don't have much in the way of assets and are "judgment proof" then save up your money and try to resolve this when you have at least 50% of whatever the balance has grown to. Judgments earn interest at a rate of 8% per year in NC. If the creditor wants more than 50%, see if you can use whatever you save up as a down payment and pay out the balance over 1-12 months. Some creditors will not let you pay out like this and if that is the case, keep saving till you can pay in a lump sum. It is important that if you are able to resolve the debt in this manner that you get a writing from the lender before you pay a penny. If you want to resolve the debt and have the funds but would prefer not to do it yourself, I can assist you for a reasonable fee. I will be happy to review your circumstances for free via email. If interested, you may contact me at [email protected]/* */