Suing a friend because he tries to run away with the car without paying the car loan

[halloweenprince]

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

What is the name of your state (only U.S. law)? California

Hi everyone,

First of all, I apologize if I post this question in the wrong forum because I am not familiar with the legal stuff at all. I think this is the best place to start with.

I live in San Leandro, California and my family is experiencing a situation stated below.

My father and his friend bought a car around 3 months ago. It is a brand new car around $18,000. This car is actually for the friend's own use because my father already has his own car. However, his friend rejects to be on the car loan for whatever reasons. Thus, as a friend, my father agrees to help him by being on the car loan himself but the friend needs to make the full amount of monthly payments until it is paid off. After it is paid off, both my father and his friend will be on the title of the car.

In the first 3 months, his friend did pay the monthly payments. Starting last month, he did not pay the July payment which was due on August 1st. Until now, he has not paid this month payment as well. It seems like he will not make any further payments. He argues that he is not responsible for the payments because his name is not the car loan, but the car still belongs to him because he is on the title of the car.

Recently, my father has finished refinancing our home mortgage and the car loan is also combined with the home loan per the bank's request. Thus, the car is paid off soon and the title will be sent from California DMV to our home address. It will have both the names of my father and his friend.

What should my father do to make sure that his friend pays the monthly payments to him until it is fully paid? He is afraid that his friend will run away with the car. The friend just recently quit the job and no longer works at my Dad's workplace.

We want to sell the car because my Dad does not want to be involved in anything with his friend.

What is the best thing we should do in this case?

PLEASE HELP! I APPRECIATE ANY INPUTS FROM ANY OF YOU!

 

[CdwJava]

I live in San Leandro, California and my family is experiencing a situation stated below.

My father and his friend bought a car around 3 months ago. It is a brand new car around $18,000. This car is actually for the friend's own use because my father already has his own car. However, his friend rejects to be on the car loan for whatever reasons. Thus, as a friend, my father agrees to help him by being on the car loan himself but the friend needs to make the full amount of monthly payments until it is paid off. After it is paid off, both my father and his friend will be on the title of the car.

Who is currently listed as the registered owner?

Who pays the insurance?

Who is currently in possession of the car?

He argues that he is not responsible for the payments because his name is not the car loan, but the car still belongs to him because he is on the title of the car.

If the car has not been paid for, then there is no title in anyone's possession. Do you mean that the other guy's name is on the DMV registration?

Recently, my father has finished refinancing our home mortgage and the car loan is also combined with the home loan per the bank's request. Thus, the car is paid off soon and the title will be sent from California DMV to our home address. It will have both the names of my father and his friend.

That could be unfortunate if dad wants to gain possession of the car. Now, if the title indicates Friend OR Dad, then either one of them could turn around and sell it. If it says Friend AND Dad, then BOTH would have to agree.

What should my father do to make sure that his friend pays the monthly payments to him until it is fully paid?

Seek a written contract with the other guy that includes the consequences for failing to make the payments.

He is afraid that his friend will run away with the car. The friend just recently quit the job and no longer works at my Dad's workplace.

If the friend's name is on the registration, that might be a possibility.

We want to sell the car because my Dad does not want to be involved in anything with his friend.

What is the best thing we should do in this case?

He'll have to speak to the loan company and find out how he can do this since he doesn't yet own the car.

There is always the option of defaulting on the payments and the car can be subject to repossession ... your dad might still be liable for the balance (or most of it), but he'd be out from underneath it. He might discuss with the lien-holder.

Your dad made a mistake entering into a business agreements without any contracts to enforce his rights.

 

[halloweenprince]

Who is currently listed as the registered owner? My dad is the primary owner and his friend is secondary.

Who pays the insurance? HIs friend does.

Who is currently in possession of the car? His friend.


If the car has not been paid for, then there is no title in anyone's possession. Do you mean that the other guy's name is on the DMV registration?

Yes. No one has the title now. The DMV still has it and will mail it to us soon.

That could be unfortunate if dad wants to gain possession of the car. Now, if the title indicates Friend OR Dad, then either one of them could turn around and sell it. If it says Friend AND Dad, then BOTH would have to agree.

The title will be my dad AND his friend.

Seek a written contract with the other guy that includes the consequences for failing to make the payments.


If the friend's name is on the registration, that might be a possibility.


He'll have to speak to the loan company and find out how he can do this since he doesn't yet own the car.

There is always the option of defaulting on the payments and the car can be subject to repossession ... your dad might still be liable for the balance (or most of it), but he'd be out from underneath it. He might discuss with the lien-holder.

Your dad made a mistake entering into a business agreements without any contracts to enforce his rights.

What if he does not want to pay back? What is the worst case? What will be the best my Dad should do to at least minimize the loss?

 

[katiekate32]

Does he have the car?

If your dad has the car in his possession...or does at any point in time...take the car and hide it.

The title is a mess. Not sure why anyone would put someone on a title when they have no skin in the game. Well, removing him from the title isn't going to be easy. I think you need to go get a court judgement that you can take to the DMV to get the title into just your Dad's name...then he can sell it with just his own signature.

 

[OHRoadwarrior]

I suggest dad negotiate with the loan company to have them repossess the car for a late payment and repurchase it himself.

 

[Ohiogal]

I suggest dad negotiate with the loan company to have them repossess the car for a late payment and repurchase it himself.

Dad's credit gets tanked in that case. Dad is on the loan but friend is on the memo title. Hence friend has a claim to the car. Dad needs to make payments. He screwed up with this whole thing and made a bad deal in that he may be purchasing a car for his friend and his friend doesn't have to pay a dime on it. Dad's only hope is to sue the friend and prove that there was a contract for the car purchase between him and his friend. However he may be out of luck due to statute of frauds if it was NOT in writing.

 

[Zigner]

If your dad has the car in his possession...or does at any point in time...take the car and hide it.

Ahh - wonderful. This newbie is advising the OP's father to (possibly) commit a crime.

(or, at the least, a tort)

 

[OHRoadwarrior]

A one payment credit ding is well worth the hit to fix this if negotiated. The repo and resale to dad do not need to be recorded against him formally. He would be buying the car at auction with a minimum bid of the loan balance.

 

[CdwJava]

My dad is the primary owner and his friend is secondary.

The registration does not designate this - it merely has their names on it. Does it list Dad AND Friend, or, Dad OR Friend ... the conjunction is vitally important if dad wants to do something about this.

Yes. No one has the title now. The DMV still has it and will mail it to us soon.

Who will they mail the title to? Whose address is on the registration?

The title will be my dad AND his friend.

That will mean that if dad wants to change anything - or sell the car - they will BOTH have to agree.

What if he does not want to pay back? What is the worst case? What will be the best my Dad should do to at least minimize the loss?

Dad can sue the friend for the loss ... if the amount is over $10,000 then he may have to hire an attorney and that will limit how much he can receive ... assuming that the friend has the resources to pay an award if dad prevails.

 

[CdwJava]

Ahh - wonderful. This newbie is advising the OP's father to (possibly) commit a crime.

(or, at the least, a tort)

It wouldn't really be a crime in CA as they are both registered owners and, it seems, titled owners. There might be a tort involved, but then the friend would be bringing up the contract matter and that may not be something he'd want to do.

But, it doesn't seem that dad ever has the car.

 

[Zigner]

It wouldn't really be a crime in CA as they are both registered owners and, it seems, titled owners. There might be a tort involved, but then the friend would be bringing up the contract matter and that may not be something he'd want to do.

But, it doesn't seem that dad ever has the car.

Fair enough

(I was thinking "conversion")

 

[halloweenprince]

Thank you for all of your inputs!

If your dad has the car in his possession...or does at any point in time...take the car and hide it.

The title is a mess. Not sure why anyone would put someone on a title when they have no skin in the game. Well, removing him from the title isn't going to be easy. I think you need to go get a court judgement that you can take to the DMV to get the title into just your Dad's name...then he can sell it with just his own signature.

My Dad never has the car in his possession. Now he just quit the job and no longer works with my Dad. He may just run way with the car without worrying about anything because he is one of the titled owners.

Dad's credit gets tanked in that case. Dad is on the loan but friend is on the memo title. Hence friend has a claim to the car. Dad needs to make payments. He screwed up with this whole thing and made a bad deal in that he may be purchasing a car for his friend and his friend doesn't have to pay a dime on it. Dad's only hope is to sue the friend and prove that there was a contract for the car purchase between him and his friend. However he may be out of luck due to statute of frauds if it was NOT in writing.

You are correct. There has not been any written contracts between them about the friend's responsibility to pay the payments. But my Dad is the only one who is on the car loan. Thus, does he have the full claim of the car? And it has been paid off as we refinanced with another bank so my Dad is the only one who paid everything for the car. The friend paid just the first 3 months and that was it. Can he do anything to get the car back to him and sell it?

The registration does not designate this - it merely has their names on it. Does it list Dad AND Friend, or, Dad OR Friend ... the conjunction is vitally important if dad wants to do something about this.

Who will they mail the title to? Whose address is on the registration?


That will mean that if dad wants to change anything - or sell the car - they will BOTH have to agree.


Dad can sue the friend for the loss ... if the amount is over $10,000 then he may have to hire an attorney and that will limit how much he can receive ... assuming that the friend has the resources to pay an award if dad prevails.

The title list DAD AND FRIEND. The title will be mailed to my Dad as it is the address on the registration. Should we talk to the friend first about having him signed a promissory note that he would have to pay a certain amount per month until it is fully paid? Or should we just go ahead and hire an attorney to sue him? What are other possibilities? What is the best option in your opinion?

It wouldn't really be a crime in CA as they are both registered owners and, it seems, titled owners. There might be a tort involved, but then the friend would be bringing up the contract matter and that may not be something he'd want to do.

But, it doesn't seem that dad ever has the car.

My dad never ever has the car. It still in his friend's possession now.

 

[halloweenprince]

What to do at the mean time?

What is the first thing we should do now? Please help! Anybody knows how much it would cost totally to hire an attorney? How much is the court fee?

 

[katiekate32]

not at all

Ahh - wonderful. This newbie is advising the OP's father to (possibly) commit a crime.

(or, at the least, a tort)

the car is in the name of the DAD.. he is taking what is rightfully his.

If the other guy wants to make that claim before a judge...the judge will ask one easy question..who is paying for it? who is on the loan?

Judges are not stupid. They too can think

 

[halloweenprince]

the car is in the name of the DAD.. he is taking what is rightfully his.

If the other guy wants to make that claim before a judge...the judge will ask one easy question..who is paying for it? who is on the loan?

Judges are not stupid. They too can think

Yes. My dad paid it off and he is the only one on the loan. So we would have a better to win this case and take the car back?