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  1. #1

    Default Stuck with Broken Down Vehicle and No Title

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

    In 2008 my husband and I were splitting up. I needed cash to get into a place of my own, so I took out a title loan on my car for about $400. Two months in I was late on a payment (just needed to wait until I got my paycheck) and they came out to repossess my vehicle. Unfortunately for them they went to my husband's address and (of course) the car wasn't there. He called and told me they'd come to repo, and I made the missed payment as soon as I got my check. Several months later I lost my job and couldn't make my payment, so the loan company advised me to do a "re-advance". They plugged into their computer that I'd made a payment, cut me a check for another $400, and then followed me to the bank so I could cash the check and give them the cash they'd already told the computer I paid. I had trouble finding work and had to do this "re-advance" several months in a row, until I was in debt to them for $2080. I always paid back the excess cash the following day.

    For nearly 2 years I made the payments on time and as stated in my loan contract. I paid $245/month. All told I repaid them more than $6500 on the $2080 I'd borrowed. When I finally thought to ask how many more payments I had left, they said I still owed them $2080 and that all this time I'd only been paying interest on the loan!!

    I sat down and did the math, and discovered that even though the stated interest rate on my loan was 1.21%, I'd paid them far, far more. I sent a certified letter to the location where I obtained the loan and to the corporate office stating that I thought this was predatory lending and disputing the debt. At that point I'd lost my job again and hadn't made the monthly payment, they were telling me that I had to pay the full $2080 or voluntarily surrender the vehicle. I offered to make cash payments in good faith, knowing that it wouldn't prevent repossession/collection action, but I'm not the type who bails on my bills. They refused to take a single cent. I got a letter back from the corporate office stating that I needed to speak to the District Manager. Sent another certified letter asking for his contact info and never got a response. Called the loan location and got the same tired line: surrender the car or else.

    I decided that I'd done my part: I paid them back three times what I'd borrowed, I'd offered to keep making payments, and I'd asked for an explanation as to why I hadn't satisfied my part of the bargain. They didn't respond to my letters, they stopped calling, and the only thing they'd tell me when I called them was that I had to pay the $2080 or come down and give them the car. I haven't heard from them in almost a year. There's nothing on my credit and they've not filed anything in court.

    Two weeks ago the car in question suffered a catastrophic mechanical failure. It needs a new engine and it will cost more to fix than what the car is worth. In its current condition the car is worth less than half of what the title company wants me to pay for it. If I sell it for scrap I could probably get between $200 and $400 for it.

    So, after all that info, here are my questions:

    1. I feel like the title loan company did something shady, maybe not-quite-legal. Did they? Would it be worth my time to contact an attorney with it?
    2. Does anyone know how it's possible to make your payments on time, as scheduled, and not make a dent in your loan?
    3. Is it possible to sell the car for scrap without a title? Would I face criminal charges for it? I've already paid the loan company too much, and I could really use the scrap value towards something to drive, but it's not worth catching a charge.

    Thoughts and info are greatly appreciated.

  2. #2
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    Default Re: Stuck with Broken Down Vehicle and No Title

    Quote Quoting MaidenAwesome
    View Post
    I sat down and did the math, and discovered that even though the stated interest rate on my loan was 1.21%...
    First, if you were signing new loan contracts with each of these new deals, you may have been incurring fees - read your contracts from the loans. You may also have incurred late fees, repo fees, and the like. Second, 1.21% per... what? Certainly not per annum. Compounded how often?
    Quote Quoting MaidenAwesome
    1. I feel like the title loan company did something shady, maybe not-quite-legal. Did they?
    We have no way to investigate that for you. I suggest attempting to determine what agency in your state regulates title loan lenders, then seeing what they can make of the paperwork and financial records.
    Quote Quoting MaidenAwesome
    Would it be worth my time to contact an attorney with it?
    That's something you'll have to determine after consulting the lawyer.
    Quote Quoting MaidenAwesome
    2. Does anyone know how it's possible to make your payments on time, as scheduled, and not make a dent in your loan?
    See above.
    Quote Quoting MaidenAwesome
    3. Is it possible to sell the car for scrap without a title?
    Unless you're dealing with an illegal chop shop, I am skeptical that you will find a buyer who will take the car without a transfer of title.
    Quote Quoting MaidenAwesome
    Would I face criminal charges for it?
    Last I checked, your state did have a criminal statute criminalizing acts meant to frustrate a secured creditor's attempt to repossess following a loan default.

  3. #3

    Default Re: Stuck with Broken Down Vehicle and No Title

    Quote Quoting Mr. Knowitall
    View Post
    First, if you were signing new loan contracts with each of these new deals, you may have been incurring fees - read your contracts from the loans. You may also have incurred late fees, repo fees, and the like. Second, 1.21% per... what? Certainly not per annum. Compounded how often?
    I did not sign a new contract with each "re-advance". I signed a waiver stating that I was not an active duty member of the military, and a payment sheet stating that I had made a payment and when the next payment was due. I was never provided a full copy of the contract and though I requested one in my letter, they've never responded.

    Quote Quoting Mr. Knowitall
    View Post
    We have no way to investigate that for you. I suggest attempting to determine what agency in your state regulates title loan lenders, then seeing what they can make of the paperwork and financial records.
    I've contacted the banking regulatory committee for my state, well, I filed their online form, same with the FTC. Waiting to hear back, suppose it could take a while.

    Quote Quoting Mr. Knowitall
    View Post
    That's something you'll have to determine after consulting the lawyer.
    Guess I've got some phone calls to make.

    Quote Quoting Mr. Knowitall
    View Post
    Unless you're dealing with an illegal chop shop, I am skeptical that you will find a buyer who will take the car without a transfer of title.
    Junkyards are not as picky as you would think.

    Quote Quoting Mr. Knowitall
    View Post
    Last I checked, your state did have a criminal statute criminalizing acts meant to frustrate a secured creditor's attempt to repossess following a loan default.
    Shouldn't the loan have been in default after the first time they tried to repossess, back in 08? Can a loan company keep loaning money to someone already in default?

    Thanks for your response.

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