Legal Question in Business Law in Iowa
iIf Pam borrows 5000.00 from Quality Auto Sales to buy a car. WHen Pam does not pay the loan ro return the car, Quality wants to transfer the right to the payment to Rapid collection Agency. Rapid agrees to pay Quality for this right, but for a price that is less than the amount owed. Can Quality transfer this right to Rapid without Pam's consent? If so, and Quality committed fraud in the deal with Pam, Could Pam legitimately refuse to pay Rapid?
2 Answers from Attorneys
I don't do homework for people.
Without knowing more I'd say no Pam can not refuse to pay. The loan is simply a chose that can be bought and sold in the financial marketplace. It's commonly referred to in the banking industry as "Paper". "Paper" is bought and sold daily. But what does the loan agreement state? In what state is the loan? What do lending laws in that state require? Notice? Probably not, but look it up and you'll have your answer. Good luck.
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