Repossessed vehicle in Florida.

[Ringwood]

My mother-in-law is 75 years old and lived in Florida up until 1 year ago. At that point she was diagnosed with terminal cancer and needed to move back home to Massachusetts for treatment.

She had a loan on a vehicle with an outstanding balance of approximately $18,000. The bank repossessed the vehicle a year ago when she moved. She is now getting a statement from the bank saying she owes $8,000 for the remaining balance on the vehicle. She has no assets, house, car, etc.

Her only income is $382 a month from a pension and $2,032 from Social Security.
Her only other asset is a IRA with about $14,000 in it, which supplements her monthly income.

Is there any action the Creditor can take to recover this $8,000 from her? What reply should we give the Creditor regarding these demands for $8,000?

Thanks.

 

[LdiJ]

My mother-in-law is 75 years old and lived in Florida up until 1 year ago. At that point she was diagnosed with terminal cancer and needed to move back home to Massachusetts for treatment.

She had a loan on a vehicle with an outstanding balance of approximately $18,000. The bank repossessed the vehicle a year ago when she moved. She is now getting a statement from the bank saying she owes $8,000 for the remaining balance on the vehicle. She has no assets, house, car, etc.

Her only income is $382 a month from a pension and $2,032 from Social Security.
Her only other asset is a IRA with about $14,000 in it, which supplements her monthly income.

Is there any action the Creditor can take to recover this $8,000 from her? What reply should we give the Creditor regarding these demands for $8,000?

Thanks.

When she passes away whoever is responsible for her estate will have to use any remaining assets (perhaps the 14k in the IRA) to cover any debts she has outstanding. Therefore its going to have to be paid. It might be wiser to just bite the bullet and use the money in the retirement account to pay them off. You might possibly be able to negotiate a smaller payoff.

 

[Ringwood]

Thanks for the response. A question I have now is whether the retirement account, pension, or Social Security, is something that the collectors could go after while she is still alive. Taking $8,000 out of her $14,000 retirement account is not doable at this point. It would put her in an extreme hardship.
Thanks

 

[Zigner]

If the IRA has a designated beneficiary, then it's not subject to being used to pay for debts of the estate.
I believe all of grandma's income is exempt. If so, then it might be wise to simply let the creditor know that grandma is judgment proof.