Legal Question in Credit and Debt Law in Texas

Can the creditor report me to the IRS or sue me?

2 years ago I had a car repossessed because I was out of a job and was unable to pay. When the creditor repossessed my car they auctioned it and expected me to pay the difference of approx. $6700. I never tried to pay the difference as I have not yet been in a position to do so anyway. Now they claim that they are going to either report me to the IRS and have the debt taken out of my taxes or they are going to sue me for the amount. Can they do this, and if so to what extent?


Asked on 11/09/00, 8:11 pm

3 Answers from Attorneys
Charles Aspinwall Charles S. Aspinwall, J.D., LLC

Re: Can the creditor report me to the IRS or sue me?

The claim that they will report you to the IRS and seize your refunds is pure bull. Can't happen.

The only thing they can do is file suit for the deficiency, and they don't want to do that.

You may wish to consider borrowing $3000 and offer it to them as all the money you have, telling them to take it or leave it. Couldn't hurt.

Good luck.

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Answered on 11/09/00, 10:21 pm
James Grissom Law Office of James P. Grissom

Re: Can the creditor report me to the IRS or sue me?

When a collection agency makes threats that are impossible to occur, that is a violation of the Fair Debt Collection Practices Act and the Texas Debt Collection Act. If you wish to discuss this matter further for possible representation, please call me at 1-877-320-5232.

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Answered on 11/10/00, 10:31 am

Re: Can the creditor report me to the IRS or sue me?

I don't see how they could report you to the IRS, and attempting to seize your refunds is unlikely. The threat, however, may be actionable under either the Texas Debt Collection Practices Act or the Federal Fair Debt Collection Practices Act. It is very important that you document everything that they do.

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Answered on 11/10/00, 11:45 am


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