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Loaned $1000 to a friend, im holding car title as collateral. They traded car.

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dom4400

Junior Member
What is the name of your state (only U.S. law)? NC

So I know they say never loan money to a friend but silly me did it anyway. I did have us both sign a contract for the $1000 dollar loan and it states in the contract payments will be made bi-weekly in the amount of $250 and if 2 payments are missed I can take possession of the car. My friend gave me the title to hold but did not sign it over to me. We only signed the contract for the repayment. I have not received any payments and I found out they traded the car 2 weeks ago. I am assuming they did it by filing a lost title. What are my options?
 


sandyclaus

Senior Member
What is the name of your state (only U.S. law)? NC

So I know they say never loan money to a friend but silly me did it anyway. I did have us both sign a contract for the $1000 dollar loan and it states in the contract payments will be made bi-weekly in the amount of $250 and if 2 payments are missed I can take possession of the car. My friend gave me the title to hold but did not sign it over to me. We only signed the contract for the repayment. I have not received any payments and I found out they traded the car 2 weeks ago. I am assuming they did it by filing a lost title. What are my options?
Sue the bad friend in Small Claims court to recover the money.

You couldn't have legally repossessed the vehicle anyway, since the title was unsigned and you were never added to it (either as a co-owner or lienholder). All they had to do was say that it got lost and have it re-issued, which they apparently did.
 

latigo

Senior Member
What is the name of your state (only U.S. law)? NC

So I know they say never loan money to a friend but silly me did it anyway. I did have us both sign a contract for the $1000 dollar loan and it states in the contract payments will be made bi-weekly in the amount of $250 and if 2 payments are missed I can take possession of the car. My friend gave me the title to hold but did not sign it over to me. We only signed the contract for the repayment. I have not received any payments and I found out they traded the car 2 weeks ago. I am assuming they did it by filing a lost title. What are my options?
You could have legally taken the vehicle into your possession on the strength of the signed agreement authorizing you to do so.

However, you could not have exercised the rights of a lien holder under the North Carolina U.C.C. by selling it.

On the other hand, if you had done so and kept it secure you could have taken judgment against the "friend" for the money owed and then levied execution on the judgment by having the sheriff seize and sell it to satisfy the judgment.

All moot now, of course. But what you ought to do is to check with DMV to learn if a replacement title was actually issued, when, to whom and the current status of the registration for that particular vehicle.

And if so, how that process was accomplished. Because if the erstwhile friend falsely represented the status of the original pink slip he would have committed a felony crime.

Also, it might be that if fraud was committed in securing the replacement, DMV could revoke the new registration and/or file criminal charges. And if the car was traded to a licensed dealership, that would bring on more heat.

Anyway, on top of suing him in small claims I would try to make this welching jerk’s life even more miserable than it is.
 
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