Legal Question in Credit and Debt Law in California

Almost certainly. A promissory note is something that can be transferred (technically, endorsed) to another party. If someone bought the assets of that lender at auction, then they also bought the rights to collect any loans that were due to that lender. First, ask the new company for evidence of the fact that they currently own the loan, and have the right to collect payments. This needs to be in writing, and once they provide it you may have a really unique opportunity. The current owner probably bought that loan at a discount from the face value of the loan (what you owe). Once they establish that they have the right to collect the loan, the try to negotiate a short-pay of that note. Since they paid less than the current balance, they may be willing to take less money for the note. You do, however, need to be aware of the fact that this can result in taxable "forgiveness of debt" income to you. I am not a tax attorney, so consult with your CPA or tax attorney about whether or not you will incur tax liability for discounting the note, but you may have a chance to make this go away for a lot less than what you owe. Good luck.

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