[jvjr121106]

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

The statute of limitations in Texas is 4 years, although I'm not honestly sure if that also extends to auto loans.

My sister had an auto loan with Mazda Credit, which she was told she'd completed payments for in 2002. Two years later, she recalls receiving phone calls saying she still owed $800. My sister told them she'd already paid off the car, but the woman told her that yes, while she had paid off the car, she still owed late fees. I found this very strange. Our car loan has never worked like that. Last year we found ourselves in a position where our car loan went unpaid for 2 months, so when we'd acquired jobs again, we had to make two monthly double payments to catch up. Everytime we make a payment, the interest on the loan gets paid first, and THEN whatever is leftover for the principal is applied. Basically, our bank makes sure they have their money before they allow the principal amount to be paid off, which makes sense. How is it that the same wouldn't have been applied with my sister's payments?

Mazda still has a lien on her title, so she's unable to acquire it so she can resell her car. My main question is, if the SOL also applies to auto loans, does this mean they can no longer legally try to collect on the debt, and what state does that put the title in?

I have read so many shady interactions online with Mazda Credit, and I don't want my sister to get poked in the eyes.

Thanks to anyone who can help!

Janie

[Mr. Knowitall]

The expiration of the statute of limitations provides a defense to a breach of contract suit. But it doesn't make the lien go away.