Legal Question in Credit and Debt Law in Virginia

Re: Vehicle Repossession Question.

Regardless of whether it is likely to work or

not, you should send the money to reinstate the

car loan. The worst possibility you can face

is NOT repossession, but reposession of the car

followed by a sale at a ridiculously low price.

You will then be responsible for the balance.

In effect, you will lose the car AND have to pay

for it as well.

If you offer to pay the full reinstatement, you

can perhaps defend against this in court. Legally

you should be able to defend against any

deficiency balance by claiming the defense of

"mitigation of damages." This means that a

creditor cannot unreasonably run up the bill but

must take actions to minimize the losses. If

they could have accepted payment in full, then

any additional losses caused by selling the car

for minimal value is THEIR responsibility, not

yours. The trouble is most judges do not know

this law and will often fail to follow this

law. But according to the blackletter law

doctrine of "mitigation of damages" the finance

company MUST accept your payment or else eat

any losses themselves if the repossession is

more expensive and/or causes them to lose money

by selling the car at auction for peanuts.

I would write on the check or cashier's check

above the place where the finance company must

endorse the check "For Reinstatement instead

of foreclosure" to make it clear that by cashing

the check they are agreeing NOT to foreclose.

Re: Vehicle Repossession Question.

You'll have to ask the creditors to get the answer to your first question, but the answer to your second one is easy: yes, get it in writing, not only their promise to cease repossession activity but a statement to the effect that your payment brings your account current as of a particular date.