My parents had a car repo-ed in 2003. The law firm that has it at first garnished his wages on the amount over 100$ a week, then finally set up a payment plan. But have now sent another wage garnishment. But they are charging interest on top of the interest that the bank originally charged. Is there any thing that can be done? Its been over 10 years they have been paying for this car, I dont know anyone who had a car repo-ed and had to pay this much back, at this point they could have bought two of these cars?! Can something be done?
4 Answers from Attorneys
Interest keeps running after a judgment is entered. Of course 10+ years of interested is going to add up - that is how interest works. There is something that can be done - pay the debt or file a bankruptcy case.
The statute of limitations was apparently met because a garnishment implies a lawsuit was filed and one. Judgement interest would be at a lower rate than contract interest, so make sure the interest rate is correct. However, interest can compound the debt over time. If the Judgement was entered over 7 years ago, look to see if it was renewed after 7 years. If not, traverse the garnishment. Consider bankruptcy as well, as it would eliminate the debt.
Lots of things can be done but it depends on the circumstances. However, no lawyer can discuss your parents situation with you. Your parents need to go to an attorney to review their situation as bankruptcy may or may not be right for them.
First, you indicate that the car was repossessed a long time ago. That means nothing. After a car is repossessed and sold, the lender will collect any deficiency owed on the car. If that is not paid, then the lender will get an attorney who will sue. That happened here and a judgment was entered. But when? Judgments in Georgia last for 7 years unless revived.
With a judgment, a creditor is allowed to garnish up to 25% of a debtor's disposable pay. The garnishments are good for 179 days and can be renewed any number of times until the judgment is paid off.
Judgments carry interest at the post-judgment rate which is about 7% per year. You do not indicate how much the judgment was for but the interest accrues on a daily basis and if your parents over the years did payments and stopped then with interest they could find themselves back where they started.
As I said, your parents need to see an attorney. This debt could possibly be settled in a lump sum depending on what the balance is now and if your parents have a lump sum to pay. If a creditor has been getting paid via wage garnishment, there is little incentive to settle though. If your parents cannot resolve the debt by settlement then the only option might be bankruptcy or quit work. They should do bankruptcy if they have at least $10,000 in dischargeable debts.
Filing a traverse would only work if there are grounds - traverses to wage garnishment are limited. If the judgment was properly entered then there is no basis to challenge it and your parents would have to get the judgment opened. And that is very unlikely after all this time.
Your parents have sadly thrown away money every day for the past ten years that they did not hire counsel. Judgments don't go away, and an be renewed, and interest is added to them. Frankly the reason they have paid for so long is their failure to see a lawyer. Encourage them to call me, or someone ASAP. Their options may include bankruptcy or settlement, but no one can evaluate those without information.