Legal Question in Consumer Law in Michigan

consumer rights

In August 2007, I purchased a used vehicle from a car salesman which was his personal vehicle. He told my bank there was not a lein on the vehicle and he submitted the title paper work. I have been making my payments to my bank. I recently found out that the man I purchased the vehicle from did have an outstanding lein on the vehicle and his bank is now trying to repossess my vehicle. The title paperwork from the state of Michigan shows a signature on the line for the bank to sign off on but the bank denies ever signing the title and releasing it. In the State of Michigan, a notary is not required for Titles so the signature is likely a forgery. I have the vehicle locked up in a garage and am making my payments. The remainder on my loan is $6,800. Is my bank liable at all since they did not do a title search on the vehicle? Do I have legal recourse to block his bank from rights to my vehicle or is my only choice to go after the seller because from what I understand, he is close to filing bankruptcy and would be unable to pay me.


Asked on 3/09/09, 10:17 am

2 Answers from Attorneys
Rochelle Guznack Law Offices of Rochelle E. Guznack, PLLC

Re: consumer rights

This issue is a bit complicated, buy you may have some recourse if you are a "bona fide" purchaser. I strongly suggest that you have an attorney review your documents and discuss these issues with the attorney. A little money spent consulting with an attorney would most likely be money well spent.

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Answered on 3/16/09, 10:10 am
Lesley Hoenig Lesley A. Hoenig, Attorney at Law

Re: consumer rights

If the person you bought the car from is going to file bankruptcy, you will want to hire a bankruptcy attorney to fight the discharge of this debt (or tip off the lender to do this instead), because he committed fraud and conversion by selling you the car without paying off the lien. I think you would have a strong case against him, and don't let the fact he might file bankruptcy deter you, because I think given the facts so far you probably would succeed against him (but that is assuming that there aren't other facts that would make it less likely).

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Answered on 3/10/09, 8:19 pm


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