Sold Car By Contract But Gave Title Early. Am I screwed?

[Gigabils]

Fort Wayne, IN.

I sold my car for $1500 and the agreement was for the buyer to pay $150 every Friday until the car was paid off. The contract says if he fails to pay the car off I have the right to repossess the car. Our contract was notarized and signed by both parties. Me not knowing how car deals work, I gave him the title BEFORE he fully paid off the vehicle. Is it even worth it for me to take him to small claims court? Also, he paid in cash but I have a receipt book with all of the dates and amounts he paid; is this even worth anything? I've learned that he's basically done paying me due to personal reasons when there is only $400 left. He's also trying to sell the car even though he hasn't paid me in full so I don't know how this would affect the collection.

So my question I guess is can I still repossess/get paid the full amount of the car even though the title is in his name now? Also the cash amount is on the contract so would it just default to that instead of me repossessing the car?

 

[justalayman]

When repossessing a car used as a security interest for a loan there are myriad laws you must follow. I can't speak to them with any specificity but usually a creditor is required to give certain notices to the debtor requiring their rights of reclamation. After that, and the passage of some specified time, the creditor must auction the security to obtain the money owed. There are laws as to the sales process.

When suing person, you are awarded a judgment. The hard part, often, is collecting on that judgment.

Either way I suspect it's going to be a hard earned $400, if you ever actually get it.


As to them selling the car before its paid off;

If you did not file for a lien and there is nothing in your contract about selling it prior to it. Don't paid off, he has a right to sell it.

 

[adjusterjack]

Sold Car By Contract But Gave Title Early. Am I screwed?

Yeah, pretty much.

I agree with justalayman that the laws regarding repo contain a lot of pitfalls, plus you'd have to insure the car until you resold it.

Best to just sue for the $400.

But that's up to you to decide if it's worth it.

Filing fees vary by county but they are just a little under $100 and you can serve by certified mail which, unfortunately, deadbeats tend to ignore as bad news so you'll probably end up hiring a process server that can cost you another $50 to $100.

Those costs get added to your judgment.

If you know the guy has a job that means something to him and you know where he works you can do a wage garnishment and eventually get all your money.

But if he's one of those people that quits when the first deduction comes out you aren't likely to ever see another nickel.

Discouraging, sure.

Might just end up that the $400 was your tuition for a lesson from the school of hard knocks.

Next time you want to sell a car get all the money up front and be done with it.

 

[xylene]

You have no right or option to repossess the car, as you are not a lienholder on the title.

 

[justalayman]

You have no right or option to repossess the car, as you are not a lienholder on the title.

A lien is created upon the agreement to the promissory note specifying the indebtedness. The registration of the lien (which is what is shown on the title) is to prevent the debtor from transferring title to a subsequent party without permission of the creditor and notice to a purchaser.

In addition, the contract involved does specifically create a right of repossession if there was no other basis for a repossession.

Yes, by what was stated the op does have a right to repossess the car. Whether it is wise to do so or not is something the op must decide after researching the obligations of a creditor repossessing a property used as a security interest.