Legal Question in Credit and Debt Law in Kansas

My mother who is 74 and on a fixed income thought she co-signed for a used car loan for my brother, and found out later that she is the primary loan holder and he is not on the loan. They overpaid for the car and were sold a lemon. They paid $10,000 for a car that was worth about $3,000-$4,000, and with interest the loan was $15,000. The car is not operational and repairs would total over $5,000, but they still owe $10,000. We called the bank to do a voluntary repo and they said they would not repossess the car because of it's value, and her only alternative is to either make the payments, or try to sell the car and have the bank agree to the price. We would salvage the car but without the title we can't even do that. She can't afford to make the car payments. Any ideas?????


Asked on 4/26/10, 5:02 pm

1 Answer from Attorneys
Sean Santoro Santoro Law Office

Does the bank have a close business relationship with the seller? If so, and if the car was grossly overvalued, or if there was actual fraud in the sale, the bank might be in violation of federal and state lending statutes. Even if the bank does not have a business relationship with the seller, the bank has a duty to fairly value assets prior to a loan. As to the seller, if a good does not conform to contract, or if there was fraud, you may have a claim in the Circuit Court for breach of contract and/or fraud.

You should have a title. If not, it is illegal to sell a car in Missouri without a title. If you do have a title, and you do not want to file a court case, you can have the car towed to the bank and surrender it with the keys and title. Unfortunately, this will not only damage your mother's credit, it will probably result in a big default judgment being entered against her.

I would also pressure your brother to do the right thing and have himself entered as a cosigner on the loan, since all of this was for his benefit.

Bottom line: Consult with an attorney if you do not want to do these actions yourself.

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Answered on 5/03/10, 9:24 am


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