My fiancé’s ex has a vehicle that is in his name and she has stopped making payments and now the finance company wants the vehicle. We do not know where she is and we are afraid they will start garnishing his check. What can we do?
Your fiancé’s ex needs to consult with an attorney licensed in your state to determine what action this creditor can take against him to enforce the debt his ex is unable to repay. In most states, a creditor can garnish a consumer’s wages, levy his or her bank accounts, or even take action to seize property, as it has threatened in your case. Auto repossession is the most typical path to recovery, for a delinquent auto loan. If your fiancé was not a guarantor on the loan, and you do not live in a community property state then I would ask the attorney if he has ANY obligation to the loan for repayment... but I suspect it was co-borrowed, in which case both parties are obligated to the loan.
However, before a creditor can undertake a garnishment, it must first file a lawsuit and obtain a court judgment against the debtor. Even if this creditor has a judgment against your fiancé, I would be very surprised if it would actually try to garnish him. Most states exempt a portion of the value of a vehicle from creditor execution; for example, California consumers can exempt up to $2,550 of the equity in their vehicles from their creditors. Before this creditor can auction your vehicle, it must pay off the current secured auto loan and reimburse for her state exemption. Since many Americans owe more on their vehicles than their property is worth, seizing a judgment debtor’s vehicle is often a losing proposition for creditors, especially considering they usually receive significantly less than the vehicle is worth at a judgment sale. In addition, unsecured creditors, such as those that issue credit cards and personal loans, may not want to seize consumers’ property due to public relations issues; consumers may be hesitant to use credit cards or personal loans if they think that they could lose their home or car in case of default.
Collection agencies frequently make threats they often cannot or do not intend to act upon in an effort to convince consumers to pay old debts. As I said, an unsecured creditor cannot seize any property until it has filed a lawsuit and obtained a judgment; despite this fact, few creditors actually choose to pursue legal action against consumers. This creditor is likely making these threats to frighten your fiancé and make him think that he must pay this debt immediately. To make sure that you are making an informed decision regarding how your fiancé should proceed with this debt, I again encourage him to consult with an attorney in your state to discuss what action this creditor can take to enforce this debt.
To learn more about the various options available to your fiancé to help her resolve this debt, I encourage you to visit the Bills.com Debt Help page.
I wish you the best of luck in resolving this debt, and hope that the information I have provided helps you Find. Learn. Save.