Legal Question in Credit and Debt Law in North Carolina

North Carolina - Spouse died - vehicle loan in name of this spouse. County office advised surviving spouse that if she wanted to retain the vehicle to continue to make payments and when fully paid and the title was received they would provide the documentation to have the title transferred. 2 years after death, the loan payments became behind and loan institution started repocession process. Loan Institution advised that if past due amount was paid in full, the repocession would be recalled. Past due amount was paid including late fees and current payment due. Loan institution called and said payment would not be accepted and car would still be repocessed because the originator of the loan was deceased. The loan payment was posted to the account, but loan institution says the car will still be repocessed. Can they do this?

Loan institution also advised that the payment amount paid above would be refunded once the car was repocessed or turned in. Are they obgligated to refund the money if the car is turned in?


Asked on 12/29/14, 1:09 pm

1 Answer from Attorneys
Rachel Hunter

This just wasn't handled correctly from the get go.

Really, the old loan should be paid off. Can the surviving spouse get another lender to pay off the car?

Lenders can do what they want. Why would they be obligated to refund the money? If you make payments on something you do not own to some lender, then you are an officious intermeddler. If you make the payment voluntarily, you are not entitled to get it back. However, since the lender here induced the payment to be made, you may have a decent argument.

What I would do is get a probate lawyer. I would also figure out what the car is worth and how much is owed. I would then look around to see how the remaining balance can be obtained and tender this to the lender (an estate should be probated for the dead spouse and the executor of the estate should be handling this) and then the car can be sold or distributed to the recipient.

This all should have been handled in probate to begin with and failing that it was critical to keep making the payments so that the title would be released. I don't know if its too late but I would consider probating this (it should halt any proceedings) and the lender will then not be able to refuse any payments since they will be made by the estate. Also, the lender cannot repo the car if they cannot find it. I would keep it out of the lender's reach while you are trying to probate an estate.

Of course, this will require the estate to pay off the car. Is there any money in the estate? What other assets are there and how titled? What other debts?

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Answered on 12/29/14, 7:59 pm


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