Legal Question in Credit and Debt Law in California

Mother passed & lender took her van without explaining any options
Our mother passed and we contacted her credit union, asking them to pick up the van. After taking the vehicle, the C.U. advised they will sell the van at auction to pay down the loan. NONE of this was explained prior. They now refuse to return it to us for us to sell. They have also frozen ALL accounts she has with them, even though there is a joint owner. Do we(there is a trust) have any recourse?

Asked on 3/08/09, 10:16 pm

2 Answers from Attorneys

David Gibbs The Gibbs Law Firm, APC

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Re: Mother passed & lender took her van without explaining any options

I am sorry to hear of the loss of your mother - this added stress is, I am sure, not anything you want to deal with right now. Attorney Stone's brief response is correct, but let me tell you why. If you had read your mother's loan agreement, or sought counsel from an attorney prior to returning the van, you would have known that in all cases where a vehicle is financed or leased, if you fail to complete the transaction (pay off the loan), then the lender will either voluntarily accept or repossess the vehicle, and do exactly as they did - sell it for much less than it is worth, and stick you (or the trust) with the bill. Your mom's estate will be liable for this deficiency, and the credit union has no obligation to return the van back to you. You will probably also find that the bank accounts are secondary collateral (additional security) for the van loan, meaning they can freeze them and keep the money in the account to satisfy the judgment. You can make a claim of exemption on behalf of the joint-owner, however, they will have to prove that the money is actually theirs. Similarly, you can track the wholesale auction of the van to make sure it is done in a commercially reasonable manner (i.e., that they don't dump the van). I would strongly suggest that you contact a probate attorney to review how this will affect your mother's estate.

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Answered on 3/09/09, 12:45 pm

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