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Advice on Problems with a Motorcycle Loan

Mark Cappel
UpdatedApr 16, 2009

Could we go to jail for missing payments on a motorcycle loan?

We bought a motorcycle back in 2006. We were able to pay for it just fine up until 08/2007. Since then we haven't been able to make payments. I called them today to see what was going on with it. Could we sell it or what they planned on doing. Them man on the phone told me that they thought we were trying to steal the bike since they hadn't been able to find our house to repossess the bike. I gave them our current address and told them in no way were we trying to hide and that I was sorry I hadn't contacted them sooner. Times have been extremely tough. Now I'm scared about what is going to happen. I know our credit score is going to be badly damaged but its really low already. Whats going to happen? Could we go to jail for this?

When a consumer fails to make payments on an automobile or motorcycle loan, the lender generally has the right to take possession of the property through a repossession. If a lender cannot locate the vehicle to take possession, it will usually take various steps to attempt to locate the vehicle and the borrower by contacting references, searching public records, and using skip tracing services. Sometimes, repossession agents will act like private investigators, scoping out the borrowers home, workplace, etc., in an attempt to locate and take possession of the vehicle. In a worst case scenario, a lender who has obtained a court order allowing them to take possession of the vehicle and cannot locate a vehicle for repossession may be forced to contact the local sheriff and swear out a warrant for evasion, or possibly for theft, depending on the laws of your state. What actions the lender can legally take are limited by state law, and some states do not allow lenders to take such drastic action, so I strongly encourage you to consult with an attorney licensed in your state as soon as possible to discuss the situation and determine what steps you need to take to rectify the problem.

The fact that your lender has been unable to repossess your motorcycle does not mean that you were trying to steal the motorcycle, or that the lender has taken any action to formally accuse you of theft. It also does not automatically mean that the lender has the ability to accuse you of stealing the car. In most cases, a district attorney would need evidence of criminal intent on your part, such as hiding the vehicle with the express purpose of denying the lender of its rights to the bike, in order to proceed with any criminal action, which is extremely uncommon and happens only in the most extreme circumstances. However, almost all vehicle finance agreements stipulate that you must notify the lender if you move to a new residence or if you change the place where the property is normally stored, so the lender may be able to charge you for the additional costs it has incurred in trying to locate you and the motorcycle.

If you cannot afford to pay off the balance of the loan on the motorcycle, it may be a good idea to go ahead and turn the property over to the lender; the debt is not going to disappear, and the longer this issue goes unresolved, the more problems it may potentially cause. For example, the creditor may sue you and obtain a judgment for the balance of the debt, which could result in wage garnishment or other enforcement action, depending on your state laws. Again, I think it would be best for you to consult with an attorney in your area to discuss this situation and find out specifically what action the creditor can take against you under your state law. Your attorney should also be able to assist you in resolving the debt by negotiating with your creditor to obtain the best possible outcome for you.

To learn more about the repossession process, you can visit the Federal Trade Commission’s website. I wish you the best of luck in resolving this problem, and hope that the information I have provided helps you Find. Learn. Save.




JJane Tolentino, Jan, 2020

Can i go to jail for not paying for my motorcycle due to a motorcycle accident? I've got a major injury and not going to work until now.

DDaniel Cohen, Jan, 2020

Jane, you can be held financially responsible for the payments you missed and any debt that remains on the loan balance, plus whatever interest and fees the loan agreement and Texas law permit. You should not be facing any criminal issue, from what you described, nor face any jail-time. 

AAJ, Sep, 2011
Very informative. I live in the Philippines and have the same problem. I have a motorbike that I cannot pay off anymore but the lender has not gotten it yet. I am so worried saying they'll be suing me but I have asked them a lot of times if they can just get the motorbike but nobody ever did yet.
SSmall Business Loans, Apr, 2010
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