credit card co. judgement, car & equity

[annajosie]

What is the name of your state? Fl. have judgement on me from credit card co. I have a car that I owe 8,700 on with a value of 9,925. I have $1000 exemption on vehicle in Fl. that leaves non exempt value of $225. can cc co. take car and if they do, do they have to pay original lender of the car in order to get a clear title? Also, can they touch any equity line of credit payments from my home? I am on social security and that's the only income I have. Also, the car's air conditioning is not working properly and I'd like to know if that would lower the value of the car bringing it lower than the non exempt value?

thanks for any input

 

[JETX]

What is the name of your state? Fl. have judgement on me from credit card co. I have a car that I owe 8,700 on with a value of 9,925. I have $1000 exemption on vehicle in Fl. that leaves non exempt value of $225. can cc co. take car

Yes.

and if they do, do they have to pay original lender of the car in order to get a clear title?

No. Your 'deal' with the lender is still yours. You would be liable for any shortage.

Also, can they touch any equity line of credit payments from my home? I am on social security and that's the only income I have.

HUH?? How do you have an income from your home?? Do you mean you have a reverse mortgage??

Also, the car's air conditioning is not working properly and I'd like to know if that would lower the value of the car bringing it lower than the non exempt value?

Probably not.... since the vehicle would be sold at auction (usually for less than 50% of its book value).

 

[GulfBreeze]

Yes.


No. Your 'deal' with the lender is still yours. You would be liable for any shortage.


HUH?? How do you have an income from your home?? Do you mean you have a reverse mortgage??


Probably not.... since the vehicle would be sold at auction (usually for less than 50% of its book value).

some of your answers troubled me.

are you saying, if the debtors owes like $500, they can take a car that has a lien on it and owes nearly $9k and sell it for around $4000 to get their $500 and leave the debtor out the rest along with the lien holder? the car legally is not owned by the debtor...he owes money on it and they have the lien on it...not the group who is seeking the $500...please explain how this can happen to this person?

 

[TinkerBelleLuvr]

Something seems reversed here. Wouldn't the lien holder of the car have first dibs if it is sold? If so, the other creditor wouldn't get a dime. I thought that if you have a secured loan, with little equity, it wouldn't be worth their while. I can them saying "sell the car" so that the money that was going for the car can go to them.

 

[GulfBreeze]

Something seems reversed here. Wouldn't the lien holder of the car have first dibs if it is sold? If so, the other creditor wouldn't get a dime. I thought that if you have a secured loan, with little equity, it wouldn't be worth their while. I can them saying "sell the car" so that the money that was going for the car can go to them.

plus, if the car has a joint owner, they can not touch it...

the 1st lienholder get their money first. also...not the creditor seeking his judgment

 

[annajosie]

he does have a reverse mortgage. once the equity money is in the bank, it becomes non exempt and can be taken by creditors. In the case of the car, The cc co. would have to pay off the original lender in order to obtain a clear title or they could not sell the car.

the debtor should not be responsible for paying off a car that he no longer has if his deal is with the original lender and he is making his payments to the lender in a timely manner.

I believe the cc co. could take the car, but if they have to pay off the original lender to get clear title, and then sell the car at auction, what would they gain? It the value of the car is 9925 and they have to pay off the car at 8700, they are left with a balance of 1,225 and if they sold it at auction for 50% of that value, they would walk away with about $600, minus any costs incurred in repoing the car, advertising the auction sale, etc. Would it be worth their while to do something like that?

 

[Chien]

You're right about the car, and a "seize and sell" makes no sense at all.

 

[JETX]

are you saying, if the debtors owes like $500, they can take a car that has a lien on it and owes nearly $9k and sell it for around $4000 to get their $500 and leave the debtor out the rest along with the lien holder?

Nope.. that isn't what I said at all. (Begin Credit Collection Law 101 for the uneducated...)
Using YOUR example.
Car with $9000 owed. 'Owner' decides to not pay valid judgment. Judgment creditor uses legal processes available within the state and seizes the vehicle. Debtor now has a specific number of days (depends on state) to 'find' the money and pay the judgment and recover vehicle. If the debtor doesn't, vehicle goes to auction and sells for $4000. The first $500 (judgment amount) goes to the judgment debtor. Sheriff collects another $500 in storage and seizure fees. Auction house gets $200 (5% of sales price), leaving $2800 to be returned back to judgment debtor. Judgment debtor then pays the $2800 to the lender, leaving $6200 that the debtor still owes to the lender.

 

[TinkerBelleLuvr]

Still confused. There are two owners on the car, of which one is NOT a party to the judgment. Where is this person's rights?

 

[annajosie]

judgement, car and home equity

with all due respect, I do not agree with Jetz's post. If a debtor has a judgement against him for an UNSECURED loan from a credit card co., it is true that the creditor with a judgement can take the debtor's car, depending upon the EQUITY the debtor has it in. In the state of Fl. the debtor can exempt $1000 on the car. Now if the debtor owes $8700 and the value is $9925, than the non exempt value becomes $225. If the value of the car, minus the money owed, is $1000 or less, than the car is exempt and cannot be taken by judgement creditor.

If there is a non exempt value over the $1000, Yes, the creditor with a judgement can take the car, but they must pay off the original lender. How can you take a vehicle that belongs to another lender, sell it at auction, get whatever monies you are owed from the debtor, NOT the lender of the car, and then leave it up to the debtor to pay the balance to the original lender of the car.

If that was the case, then you would see every credit card co. who has a judgement siezing every vehicle that any debtor has that is owned by another lender, and selling it to satisfy the judgement. The original lender would be sueing the heck out of the credit card company because the credit card company sold property that did not belong to them. And how can you sell any vehicle (at auction or not) without a title?

That is why most creditors will not take a car that is not paid off and does not have a clear title. It is not worth their while to do this, as they would end up with little or nothing after paying off the original lender and paying the fees associated with towing the car, and advertising and selling at auction. The exception to this would be if the balance on the car was very low and there was a great deal of equity in the vehicle. Then, it might be worth the judgement creditor's while to take the car and sell it.

To clarify, this vehicle is registered to only the debtor, it is not jointly owned.

On the subject of a reverse mortgage, if equity is taken out of home and put in a bank, it becomes non-exempt and can be taken by judgement creditors. Obviously, if you have a judgement against you, you do not put money in the bank and that includes your social security check, because the creditor can freeze the bank account, leaving the debtor in the position of proving what monies are exempt and what monies are non exempt. That can take months and in the meanwhile the debtor cannot touch his social security money.

 

[GulfBreeze]

Still confused. There are two owners on the car, of which one is NOT a party to the judgment. Where is this person's rights?

Property that is held by a husband and wife as tenants by the entireties cannot be divided and thus is not subject to the claims of creditors of the husband or wife individually. The judgment debtor and/or the debtor's spouse must file an affidavit with the court and the sheriff to obtain the exemption and protect the property from the judgment creditor.

 

[GulfBreeze]

i agree anna...while he was trying to be all smart and educate us all, the creditor would not have a clear title to sell it in auction in the first place. it would not be their right to take the car and sell it to satisfy their debt before the actual lienholder on the title....that is why they don't bother with them. i just dont see that happening.

 

[TinkerBelleLuvr]

The judgment party couldn't get clear title because there would be an outstanding balance on the loan, because it was short saled. The debtor would not be obliged to pay off the loan any quicker than the terms. There would be a car out there without a clear title, therefore, the purchaser could sue the judgment party/auction company, etc for selling them a car without a clear title.

 

[annajosie]

That is absolutely right. You can't just come along and take a vehicle that belongs to another lender and sell it without first paying the first lender.

The best scenario to me, is to make sure in Florida that the value of your vehicle is $1000 or less, thereby insuring that a judgement creditor cannot touch it.

 

[GulfBreeze]

That is absolutely right. You can't just come along and take a vehicle that belongs to another lender and sell it without first paying the first lender.

The best scenario to me, is to make sure in Florida that the value of your vehicle is $1000 or less, thereby insuring that a judgement creditor cannot touch it.

that or have someone else on the title as joint owner.