Legal Question in Credit and Debt Law in California

Re: Payments take over for my car,

Your questions are a bit detailed to answer briefly herein. If you would like a free phone consultation, contact us this weeek.

Re: Payments take over for my car,

The real question is WHY would you want to "sell" your car to an otherwise complete stranger with no apparent protection?

If you bought the car at a dealership, go back and see if they will buy it back. And if you get hit with a few hundred dollars penalty, so be it. Clearly, you were not able to afford the car in the first place, if you want someone else to take over payments at this point. Or call the bank and tell the bank you want to surrender the vehicle, and see if that convinces the bank to work with you on payments. There are other ways to try to get the lender to renegotiate payments. Even doing a new loan can accomplish that.

But giving the car to a stranger is not one of the ways that I would recommend dealing with this situation. Especially a stranger that gives you a story like the one relayed. If her credit is that bad, she's a bad risk. Tell her to get conventional financing and pay off the loan on the car as part of the purchase. Here's a good rule of thumb -- if your buyer cannot secure conventional financing, then your buyer has some problems. And there's no legitimate reason to make them your problems. Because sure enough, they will eventually be your problems. This proposed transaction has red flags all over it.

At any rate, answers to your questions:

What sort of conditions should I set with her?

Answer: None. Don't sell to her. If you feel you must sell to her, and there's no one else in the world you can find to sell the car to, then tell her to pay cash. Let her arrange for the financing.

How do I make a contract with her?

Answer: Go see an attorney. He/She will likely tell you not to do the deal.

What limitations should be on the contract?

Answer: She cannot remove the car from the state; you have the right to repossess without notice if any payments are late; you disclaim all warranties; she takes it as is; she must pay all costs of collection and attorneys' fees; there are a hundred more provisions that should be there.

What should I expect from?

Answer: Expect her to default. What if she files bankruptcy? What if she disappears and you cannot find her? These things happen all the time.

If she runs off with the car or doesn't make the payments would that negatively effect my credit score, even though she would sign a contract that would hold her responsible for the payments?

Answer: Unless your bank is willing to let you off the proverbial hook, you are ultimately responsible; so yes, it would affect your credit. Why should your lender care that you "sold" the car to someone else. They loaned the money to you, not her. You are always responsible until the loan is paid off.

Would I be responsible if she gets into an accident?

Answer: Depends. Probably.

Solution: Run from this one and find a better way to do the transaction.