Legal Question in Credit and Debt Law in Michigan

My father bought a new car in April 2009 and financed it through his credit union. He died July 2009 at which time he had $9000 in his checking account. We turned the car in to the credit union. My mother's name was not on his checking account but she was listed as the beneficiary. The credit union says $17,000 is owed on the car and they are keeping the $9000 until the car is sold. They said they will give my mom the difference is the car is sold for more than is owed on the car. Is it legal for them to keep they $9000? Should my family have kept the car? I think we should only be responsible for the difference in the blue book value of the car and what is owed. Please advise.


Asked on 8/07/09, 10:22 am

1 Answer from Attorneys
Timothy Klisz Klisz Law Office, PLLC

No, the credit union is correct here. Just turning in the car may not have been the best idea. You should have tried to sell it on the open market to get the highest price. Essentially the contract says pay until paid off, but if the estate breaches with a voluntary repo, they have a duty to mitigate damages and sell it at auction. They apply whatever they receive and credit the account. He (or his estate) owes the difference, and if they have money on account, they can keep that.

There are a few other twists and turns here, so contact me via www.kliszlaw.com to discuss further. Tim Klisz

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Answered on 8/12/09, 10:33 am


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