Using false collateral

[hayley3]

What is the name of your state? Indiana

My ex husband took out an application and used my aunt's tractor as his collateral. The actual papers are in her name, but he went and picked it out for her so his name was on the slip of paper he used, we're guessing.
If she were to turn him in, what would happen to him?

 

[Debt Guy]

You aunt has a choice. Either pay the debt or file a police report. The lender is going to take the position that she is obligated to pay until she takes some minimum action to demonstrate that a fraud took place.

Once you aunt files a police report, then it literally is in the hands of the police and district attorney to decide what to do if anything. Most likely, the DA will file criminal charges.

 

[hayley3]

Thanks debtguy
Sorry, but I wasn't very clear. Let me explain a little better.
The loan is in his name, not my aunt's. She is wondering if she should report him for using collateral that wasn't his. Also, what would happen should he become delinquent and they decide to repossess the tractor?

Thanks!

 

[Ladynred]

The problem is w/o the collateral, he probably wouldn't have gotten the loan, right ?? So, in essence, that makes the whole thing a fraud - and he could be arrested. If he defaults and they try to take the collateral, your AUNT would have to first prove that its HERS and not his to claim/use in any way and she might even have to pay them off just to keep HER property - then go after the nephew to get her money back.

 

[hayley3]

Thanks Ladynred. That's right. He couldn't get the loan without having something as collateral. She can prove it's hers, so surely they wouldn't take the tractor since she didn't sign the loan application.

 

[Veronica1228]

Thanks Ladynred. That's right. He couldn't get the loan without having something as collateral. She can prove it's hers, so surely they wouldn't take the tractor since she didn't sign the loan application.

Could you clarify something please? In your original post you say that your ex took out an APPLICATION for a loan using your aunt's tractor as collateral, and then you say he has the loan. Could you tell me which it is?

The reason I ask is that most lenders, banks etc will do a title search on any vehicles used as collateral. Furthermore, they then put their name on the title as an interested party. I don't see how any legitimate financial institution would allow this scenario to slip past their radar.

 

[hayley3]

I forgot to post an answer to this, so

since a tractor is not registered the bank could not have done a title search.

 

[Veronica1228]

I forgot to post an answer to this, so

since a tractor is not registered the bank could not have done a title search.

Thank you. I live in the city of Milwaukee, so I don't see a lot of (or any) tractor loans. Did you get this straightened out?