Title Loan Company Out of Business - How to Clear Title

[econofemme]

My question involves an auto loan or repossession in the State of: California

I took out a title loan on my car. Later I found out the company was working without proper licensing. The company eventually lost their license, and another company has since taken over. What should I do to get the old companies name off of the title. The orginal contract that was entered into was illegal.

[jk]

find out if the new company took on all assets and liabilities. If so, they would be able to release your lien, of course if it is paid off.

[econofemme]

why would i pay off an illegal contract?

[jk]

why would i pay off an illegal contract?

because until a court determines it to be an illegal contract, it isn't an illegal contract and as such, binding.


what are you claiming is illegal about the contract

[econofemme]

The company was not licensed to give me a title loan in the first place.

[jk]

The company was not licensed to give me a title loan in the first place.

then how could they lose their license?

The company eventually lost their license, a

[econofemme]

In CA you have to have a license in each office that you take loans out in. This company had 5 offices and one license for all 5. ILLEGAL!

And the license was not in the office I used to take out the loan.

[jk]

In CA you have to have a license in each office that you take loans out in. This company had 5 offices and one license for all 5. ILLEGAL!

And the license was not in the office I used to take out the loan.

then sue them for a rescission of the contract.

there are a couple problems with that though. 1. Obviously, they are out of business; 2. rescinding a contract can mean you return the parties to the condition they were prior to the contract. That would mean you give them back their money and they release the lien. (oh damn, that would mean paying the loan back)

so, since they are now no longer in business and there is, as far as the state is concerned, a valid lien, you have a problem. Not sure how you would prove your claim of a lack of license now that they are no longer in business.

Due to that, you are kind of stuck trying to find out if this new business took over all contracts of the old business or not. If they did, you can try to make a claim of an illegal contract against them.


bottom line: you don't get to just make a claim. You have to prove it and you have to prove it to somebody that has the power to do something about it. That would be a judge.

So, you really need to know what this new company took over to know what you can do about your situation.

[econofemme]

I can prove that the company did not have a license in the office that I took the loan out in. Do you think I could do this in small claims?

[jk]

you have to have a party to sue. who would that be in your case?

as to small claims court? not sure but I believe so, as long as you are below the limit ($7500 I think)