Legal Question in Credit and Debt Law in North Carolina

Got a 1996 Plymouth Breeze through American Auto Sale. Their finance company was National Auto Finance Company, Inc. This began in 1998. Couldn't make payments so judgement was made in 1999. They reclaimed their vehicle and were to sell it for the money owed. Later on I bought a 2002 Grand Prix from another dealer and paid it in full. The American Auto Finance Company, Inc. Decided to come and get my vehicle even though it was not financed through them, it was completely paid off. I still have the title to my car that I believe was taken illegally. I didn't know what to do then. They are still houndin me constantly for a debt that should have been taken care of when they repossessed their car and taken my new one I had to get to have a personal vehicle to get around in. Why are they still pursuing me?

Asked on 8/14/13, 1:49 pm

2 Answers from Attorneys

Kenneth Love Ken Love Law

You need to sit down with a debt relief/bankruptcy attorney to sort out the story as there are some missing pieces to the story. My best guess is that the first lender repossessed the vehicle, and got a judgment for a deficiency (the difference between what you owed and what they were able to sell the vehicle for). Then when you got the new car, they took the car to enforce the judgment through the exemptions process...which you have the right to protect the vehicle if you claim such protection. It sounds like the sale of that vehicle, which is done at auction by the Sheriff was still not enough to satisfy the judgment. Again, you need to sit down with an attorney and have him/her review all of the documents to confirm what happened.

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Answered on 8/14/13, 4:07 pm

I agree with Attorney Love. The car lender is not allowed to just come and take your second car unless they first got a judgment and served you with exemption papers which you ignored. If that happens, the sheriff can seize and sell your second car and apply the proceeds to the deficiency balance.

You do not indicate when the second car was seized and sold.

And you are wrong about the lender "hounding" you. When a car is repo'd and sold, the cars are usually sold at an auto auction. These sales never bring in what the car is worth so even if the car had a relatively high value in the Kelley Blue Book, it did not bring in that much at a sale. On top of this, collection/repo costs and sale costs would be added to the balance you owed on the car loan.

Even if the amount owed was reduced by the amount of the proceeds from the sale, any judgments earn interest at a rate of 8% per year. Interest accrues on a daily basis though. I don 't know when the car was sold, but if there is still a balance left, then you are going to be back where you started unless you get this resolved. Judgments in NC can be enforced for 10 years but they can be renewed for another 10 years. So if the judgment was entered in 1999 it would have to have been renewed in 2009. If they did not renew, it does not mean that you do not owe the debt or that the debt magically disappeared. It means only that the lender cannot try to send the sheriff out to seize any more of your personal items or bank accounts.

If your car was taken recently (like a few days ago) you might be able to get it back by filing bankruptcy but that has to be done now.

If you are interested in bankruptcy (bankruptcy costs about $2000 so I recommend that clients thinking about it have at least $10,000 in dischargeable debts) then you need to speak with a bankruptcy attorney in your area.

If you are not interested in bankruptcy and want to resolve your debt in a non-bankruptcy non-litigation context, then please contact me at [email protected]

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Answered on 8/14/13, 8:01 pm

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