Legal Question in Credit and Debt Law in Florida
Collectiona after Bankruptcy
I am 22 and my mom had co-signed on my car loan. Once her BK was dismissed I contacted the finance company and they stated that because full payments were not made by the trustee during the BK that I now owed not only the payments that I was behind but the year and a half late fees. They said the only way to keep the car was to make double payments and there was no guarentee that the car would not be repossed. I turned the car over and now they've sent me a bill for $7500. Can they do this? Also, if so, do they have to take what money I can give? I'm trying to avoid a garnishment.
1 Answer from Attorneys
Re: Collectiona after Bankruptcy
Unfortunately, your mother's bankruptcy does not alter the contract (car loan) between the creditor and you. You still had the liability to ensure that the regular monthly payments were made just as specified in the loan. If those payments were not made, and the loan fell past due, then the late charges are valid.
I question whether they could repo the car for late fees only if you got the payments caught up, but since the car has been surrendered, that point is moot now.
The creditor is not required to accept payments. The creditor can sue for the balance owed (known as the deficiency). If a judgment is entered against you, then the creditor could seek a garnishment. There are exemptions to garnishment, which would make the creditor more willing to accept payments. For that matter, there are defenses to the debt itself, that may make the creditor more likely to settle the lawsuit instead of going for the whole balance.
For more information about Garnishment and Exemptions, you can check out the Debtor's Rights in the Credit section of our website, www.LaBellaLaw.com.
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