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  1. #1
    Join Date
    Jul 2016
    Posts
    2

    Default Repayment of a Loan from an Employer Upon Resignation

    My question involves a consumer law issue in the State of: Texas

    My wifes business loaned an employee money when a shady dealer tried to repossess the car. As part of the loan agreement, my wife wrote up a contract that says the amount financed, percentage, and monthly payment. As part of the agreement, the contract says that if the employee quits or is terminated, the outstanding balance is due or the employee must turn over the car. My wife also has the lien on the title (registered in the employees name). She may have to terminate the employee in the very near future due to performance issues.

    If she terminates the employee, does she have to give any amount of time for the employee to pay the balance or could she repossess it immediately if the employee doesn't have the money. Any gotchas in the contract that she may have missed or needs to address?

    Thanks,
    Potito

  2. #2
    Join Date
    Dec 2015
    Posts
    272

    Default Re: My Wifes Business Loaned an Employee Money for a Car - Repossesion

    We can't see the exact wording of the contract that was executed between your wife and her employee. If it were me, not knowing the full details, I would formally notify (in writing) the employee upon termination that the balance of the loan is due in XX days.

  3. #3
    Join Date
    Jul 2016
    Posts
    2

    Default Re: My Wifes Business Loaned an Employee Money for a Car - Repossesion

    Kboy420 - Below is the relevant language in the contract

    Repayment of Loan:
    Borrower will pay back in the following manner: Borrower will repay in the amount in equal continuous monthly payments of $350.00 (Three Hundred Fifty Dollars) on the 10th of each month starting on July 10th, 2015 and continue without break until final payment on September 10, 2017.

    If the Borrower/Employee's service is terminated by either party, the total outstanding amount of the loan will be immediately repayable. Such amount will be deducted from money's owed to the employee if necessary.

    Borrower provides as collateral the Original Vehicle Title from the following vehicle and allow Lender to become lienholder:
    Information on car redacted

    Default:

    If payments are not made on time, or in the amount agreed upon, lender has full permission of borrower to take possession of the vehicle identified above and liquidate said vehicle to fulfill any outstanding balance. Any monies above the outstanding balance will be returned to borrower.

    Upon repayment of the full loan balance, lender will remove lienholder status from vehicle title and provide title to borrower


    Below that is the signature of the employee and employer.

    Does that help to clarify?

    Thanks,
    Potito

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