credit card co. judgement, car & equity

[TinkerBelleLuvr]

okay, same scenario .... only you owe more on the car than what's it worth. because it is a secured loan, are you saying that if there is a judgment out there, they won't take the car?

 

[annajosie]

Ginny, if you owe more than your car is worth, the judgement creditor cannot take your car. YOu have what is sometimes referred to as an "upside down" loan, which means you have no equity in the car.

 

[TinkerBelleLuvr]

As I've been reading thru these threads trying to learn this portion of law, I wondered if it made much difference if you were upside down or right side up on a secured loan. Just a curiousity thing on my part. I understand about cars with NO liens, but was suprised earlier when they said that they could take something with a secured loan.

 

[annajosie]

Ginny, I know what you mean. This has been so confusing to me also. But I kept digging and reading about this and I was very surprised that they could take a secured vehicle, if there is non exempt equity in it, they can take it. It would be unlikely that they would because they have to put money out to get a clear title. Have a good evening.

 

[JETX]

Ginny, if you owe more than your car is worth, the judgement creditor cannot take your car. YOu have what is sometimes referred to as an "upside down" loan, which means you have no equity in the car.

And of course, that is pure crap!!

I take judgment debtors cars all the time.... the ONLY issue is that the car is worth more than the statutory exemption amount.
How the debtor then pays the car loan... is their problem!!!

 

[GulfBreeze]

And of course, that is pure crap!!

I take judgment debtors cars all the time.... the ONLY issue is that the car is worth more than the statutory exemption amount.
How the debtor then pays the car loan... is their problem!!!

right back at you.

try, just try taking a car that you have no legal right to take. try, just try taking a jointly-owned car that has been filed as exempted.

 

[GulfBreeze]

So..lets see.
example:
debtor has a car worth $10000. Lets say he still owes still $6000 on it. The creditor (mind you, not the one who has the lien on it) just the one who is seeking to recover the judgment he has won, say around $2000, comes and takes the car. He pays all the sheriff and auction fees and after the auction gets only $4000 for it. Well, guess what, it all goes to the lienholder because that has to be satisfied first. Anything over that amount the creditor might get to apply to the judgment. But do you really think he will do all that work for nothing. Wont happen.

 

[TinkerBelleLuvr]

But how are you going to get clear title to sell it? We aren't talking about a repo here ... we are talking of a 3rd party judgment ... why would the lien holder clear a title if THEY aren't getting all the money.

 

[JETX]

Gulfbreeze: Is it true that if you hold a shell to your ear, the shell can hear an echo??
You are a legal idiot... who's error filled 'advice' on this forum has NO basis in the law... and is only your knee-JERK 'feel good' responses is a danger to those who are in pursuit of REAL legal answers.

Ginny: A judgment creditor does NOT get title to the debtor vehicle. The vehicle is sold at AUCTION... with the proceeds going to the court. And yes, the court can ORDER the state DMV to issue a clear title.

 

[annajosie]

Okay, if that is true, then what happens to the lender who actually owns the vehicle? Suppose the unsecured judgement creditor does take the car and sells it at auction and the court can demand a clear title from the DMV, how does the original lender get his money for the vehicle that he owns?

If the debtor can't pay the unsecured debt to begin with, then has his vehicle taken and sold at auction, how can he pay the lender of the vehicle? It seems to me that the lender of the vehicle would be totally out of luck as far as recovering his property.

Who has first priority against the debtor, the secured creditor or the unsecured creditor?

Are you saying that the unsecured judgement creditor can take a secured car (secured by another lender), sell it without paying the original lender and keep the money for the unsecured debt leaving the original lender of the car twisting in the wind?

If this is the case, then the debtor would be better off filing bankruptcy, thereby keeping his vehicle and dismissing all debts to unsecured creditors.

I am very much interested in your input on this. thank you.

 

[JETX]

Okay, if that is true, then what happens to the lender who actually owns the vehicle?

The lender does NOT OWN the vehicle.... they simply have a lien on the vehicle. The lenders name is NOT on the title as owner... only lienholder. They hold the 'negotiable' title in order to protect themselves from an owner trying to sell THEIR security interest in the vehicle.

Suppose the unsecured judgement creditor does take the car and sells it at auction and the court can demand a clear title from the DMV, how does the original lender get his money for the vehicle that he owns?

The lender gets in line with any other lienholder against the deadbeat debtor.

 

[TinkerBelleLuvr]

Another question on the same subject:

What if there are two parties on the same title, and one is not a party to the judgment?

 

[JETX]

What if there are two parties on the same title, and one is not a party to the judgment?

Depends on the state laws... and who the parties are.
For example, if the two parties are spouses, then some states allow double exemptions, some prohibit any seizure at all.

 

[GulfBreeze]

Gulfbreeze: Is it true that if you hold a shell to your ear, the shell can hear an echo??
You are a legal idiot... who's error filled 'advice' on this forum has NO basis in the law... and is only your knee-JERK 'feel good' responses is a danger to those who are in pursuit of REAL legal answers.

Ginny: A judgment creditor does NOT get title to the debtor vehicle. The vehicle is sold at AUCTION... with the proceeds going to the court. And yes, the court can ORDER the state DMV to issue a clear title.

dig your head out of the sand.

The "lienholder" is the owner actually...you see, the car is the colleteral for the loan. They own and hold the title until the car is paid for. The borrower is just allowed to drive it while making payments. The lienholder may have the car repo'd if payments stop. That doesn't mean that ANYONE a debtor owes money to can just repo the car for their use and debt relief...only the actual owner of the title (lienholder).

Show me with factual evidence in writing where it says that a car may be taken and sold by someone other than who is listed on the title?

By the way...you are wrong again concerning spouses. In non-community property states, the spouse if not listed on the judgment may protect their assets from being taken. Any property that is jointly held may be protected...not double exemption, but total exemption.

 

[GulfBreeze]

Gulfbreeze: Is it true that if you hold a shell to your ear, the shell can hear an echo??
You are a legal idiot... who's error filled 'advice' on this forum has NO basis in the law... and is only your knee-JERK 'feel good' responses is a danger to those who are in pursuit of REAL legal answers.

Ginny: A judgment creditor does NOT get title to the debtor vehicle. The vehicle is sold at AUCTION... with the proceeds going to the court. And yes, the court can ORDER the state DMV to issue a clear title.

btw, do explain please, where i have stated something wrong with the advice here....

are you feeling bad and embarrassed that you are being made a fool and discredited? it's you. you are the legal idiot.