Legal Question in Credit and Debt Law in Missouri
Car Loan Unpaid
We recently traded in a car at a local dealership. The dealership requested a payoff from the bank (lienholder), paid the amount of the payoff and received the lien waver releasing all interest in the car. Two months later the bank called and said due to a clerical error the car was not paid off and we still owe $970 on the loan. We have copies of the signed, notarized lien waver they sent to the dealership as well as copies of the loan paperwork stamped paid, but the bank says they will take legal action if the amount isn't paid in 10 days. What do we do?
2 Answers from Attorneys
Re: Car Loan Unpaid
Write to the bank and tell them that due to their error, you have suffered, and will continue to suffer damages.
Re: Car Loan Unpaid
As silly as it sounds, there is a difference between the lien and the amount they say you owe. If you did not get a copy of the note returned to you marked "paid in full" then the simple release of the lien does no more than make it impossible for the bank to get the car back. It does not extinguish the debt to the bank.
You might want to talk to a lawyer in person about this one. On the one hand the bank can claim an error and it can indeed sue you (probably in associate circuit court) for the amount of the debt. You can defend saying that you changed position in justifiable reliance that they were a bank and that when they give you a figure they presumably know how to do math? By claiming something lawyers call "detrimental reliance" you may avoid having to pay.
Your best bet, if you live in an area where they have investigative reporters on TV stations, is to call the investigative reporter and ask them for help with the bank that can't do math right. (Given the recent hoopla about mortgage foreclosures and bad loans, banks don't need any more adverse publicity). If you could get this on TV, there's a good chance the bank would think twice about suing you.
In the alternative, send them a check for $200 marked paid in full and indicate in the letter that this is in full accord and satisfaction of any purported debt still asserted to be owed. If they cash the check, you would be clear of the loan. The bank is very likely to compromise this given that this is their error.
A call to the CEO of the bank might also be helpful. And one last thing: change banks.
Good luck.
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