Default on auto loan and collections advice

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READER QUESTION

I have an auto loan, it was my girlfriends car but she passed away. Am I responsible?

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Bills.com Resident Expert
Jan 13, 2012
BILL'S ANSWER

First, I think you may have some erroneous impressions about the car note. I don't understand why you have to pay for the car unless you signed the note as a guarantor (or some other capacity) at the beginning. There is a good chance that you do not need to pay the auto loan, since it is not your loan... again unless you cosigned or guaranteed that loan.

Even so, going to jail for non-payment is not possible without some very unusual circumstances. I hope the auto finance company has not threatened you with that kind of action, because it would be illegal. You will need to seek an attorney's advice about this, but rest assured non-payment of a debt is not a criminal offense in America.

You will also need to see an attorney concerning the title of the car. It would be a terrible outcome for you to pay the note down and then to find out the car really doesn't belong to you. Unless your girlfriend, (may she rest in peace) wrote a will leaving the car to you, you may not be acquiring good title as you make payments. An attorney practicing probate and other estate matters will be able to help you with that as well. If you don't want the vehicle and you find out that you are not personally liable on the note, you can turn the car in to the creditor and that will be the end of it. Do this ONLY after double checking with your attorney.

Good luck, my friend.

If you would like more information, please visit our credit resource page.

I hope this information helps you to Find, Learn, and Save!

Best,

Bill

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Comments (34)


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Bills.com
September 24, 2010
You message is unclear to me. The law office representing the creditor states it will not garnish your wages unless you agree to a payment plan? Or do you mean the law office people are telling you that they will garnish your wages if you do not agree to a payment plan? I think what you are really asking is if a payment plan you negotiate with the creditor is smarter than waiting for a wage garnishment. If that is your question, my answer is yes. Negotiate a payment plan.
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Robin .
September 24, 2010
I live in Arizona and currently have a title loan in default. The vehicle has been repossessed by the lein holder. The law office is not calling stating that garnishes of wages has been filed unless I start a payment plan. Please advise on procedure.
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Bills.com
September 23, 2010
Yes, the fact you are making an incomplete payment is showing positive intent, but on a secured debt (such as a mortgage or vehicle loan) an incomplete payment is almost as bad as making no payment at all. Review your loan contract for your exact terms and conditions. Your best course of action is to continue to communicate your intentions to the creditor.
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Jessyca .
September 22, 2010
I brought a car in November of 2005 and have been paying my loan ever since. I lost my job once before and it was taken by the bank. I borrowed some money and got it back. I have been laid off recently and have managed to stay on top of my account; however last month i couldnt pay it because i moved. I did send them two payment but still owed them $135. They are threatening to take my car even though i am making payments. The last time they took my car i didnt make a payment for 4 months and now that i am scrapping up any money i can to pay them they still want to take my car. What can i do? Can they still take my car even though i am making payments?
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Bills.com
August 04, 2010
The answer to your question is, "unlikely." Please see the Bills.com resource Am I Liable for My Deceased Spouse's Debts? to learn more about your family's liability for the decedent's debts. Please ask any follow-up questions you may have on that page.
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Dee .
August 03, 2010
My Father passed away 2 months ago and he had a auto loan with a balance of 23k that was only under his name only...Questions is if we give the car back to Wells Fargo will they try to sue my mom for the remaining balance...My parents do own a house together.
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Bills.com
May 27, 2010
If you want to fix your credit sooner rather than later you need to take action now. The only question is what. First, learn who owns your collection account. Odd as this may sound, a debt is an asset that can be bought and sold. Second, start negotiating with the owner of your collection account, which is probably a collection agency. It bought your account for pennies on the dollar, so you have some room for negotiating the final amount. See the Bills.com resource Debt Negotiation and Settlement Advice to learn tips and tactics on negotiating.
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Jonathan .
May 27, 2010
Bill, I have a question. I purchased a 2004 Honda Pilot about 3 yrs ago and never really made my payments on time. The original loan amount was for 25k but after almost 2 years of paying and not paying the amount owed to the bank (Citifinancial) added up to be around 27k. I totaled the vehicle back in January of last year and did not have gap coverage...soooo the vehicle was only worth 14k and left me with a debt of 13k. My question is this...Should I work out a payment arrangement with the bank or should I try to settle on it or just pay nothing on it? I want to fix my credit as quick as possible and this 13k is killing me. I have not setup any arrangements with the collection company and wanted to get advice from you first. What would be the best method to getting this behind me? Sincerely, Jonathan
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