Sold a Vehicle to a Friend and He Stopped Paying Me

[ldouble619]

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

Hello,

Here is my situation, I sold a car to a friend of mine for 6500.00 and wrote up a contract that stated he would pay me 1500.00 at signing and 1500.00 15 days later, and then 300.00/month for 12 months.

Well we signed the contract he gave me the check for 1500.00 and made the first payment of 300.00. both checkes cleared. he gave me a check for the other 1500.00 and it bounced....

and of course two months later I have not seen any payments or the rest of the down payment (1500.00). I have tired to contact him by phone and of course the check is in the mail..

To protect myself I still have the title in my name and a spare key. Can I just go take it back or do I have to give him notice? I'm afraid if I give me a notice of repossion or something like that he will destroy it..

Please help on what I should do. I don't want to break the law, and end up hurting myself, and I don't want to rely on him having insurance..

[aaron]

Do you still have the check the bank returned to you? You can re-deposit it. You just have to be careful that it doesn't bounce again, as each time you deposit it and it bounces you'll pay your bank a fee. You may be able to cash it at the issuing bank - they won't honor it unless there's money in the account - rather than depositing it in your own account. If you know your friend's payday, you may be able to time your effort to clear the check for a day when he's likely to have money in his account.

Another thing you can do is stop by your local police station and ask them for the forms for a bad check. They'll give you a notice that you can fill out and send to the buyer demanding payment. If you do that and your friend doesn't pay, the police will review the case to see if they should prosecute (but ideally it won't come to that). You want the money and not the car, right? So it's worth trying. You can then go to small claims court for the rest, and if your friend has a job but doesn't pay the judgment ask about getting an order of garnishment.

If the car is still in your name, you still own it. But I would not suggest taking it without informing the local police that you are doing so, as it's likely to end up reported stolen. (If it needs to be said, don't call 911 to tell them that you're taking the car. It's not an emergency, so go in person or use a non-emergency number.) The problem is that you are then in a position where your friend can demand a refund of the money you've accepted from him and sue you in small claims court.

Yet another approach would be to talk to your friend, trying to put aside all of the bad feelings about what he's done, and suggest that if he can't afford the car you should sell it to somebody else. Let's say you find a new buyer for $5,600. He gets about $1,400 (the $1,800 he paid less the $400 decrease in sale price, less perhaps also the bad check fee he caused you to pay and the cost of advertising). You get the rest. In my opinion, any such deal should involve his voluntarily returning the car to you now so you can protect your own interest.

You should never sell a car to somebody else while keeping the registration in your own name. You're still the legal owner, so people can sue you if the driver of the car gets into an accident. Further, after an accident your insurance company will probably decline coverage, because selling the car (even if the title remains in your name) almost certainly violates your policy.