Car Dealer closed down....still paying for car

[nlauser1]

What is the name of your state? Delaware

My daughter purchased her first car independently March of 2019. Her paperwork lists a lending company that in an entity search I have found as active and is a subsidiary for another company. She has never received any information on the lender by mail. She has been going into the dealership and making payments with cash and has kept every receipt. She went into the dealership to make her usual payment and was told they can no longer accept payments there. The previous owner of dealership had sold the dealership in an asset only sale. They gave us a paper with a phone number to call. I called for her and the woman I spoke to gave me a PO box to mail payments to. She told me the lender that's on her contract has gone out of business and they are working on finding a new lender for her loan which could take about 3 months. She said to just continue sending her payments. I am wary of sending payments to a PO box. We have received no written letters that the dealership has closed and nothing about the lender being out of business. The dealership is showing as an inactive entity as of 2/16/20 due to having no assigned registered agent. I am filing a complaint with the consumer protection unit of the attorney general because I feel like something isn't right. Can this company still collect money from her? The lending company is in another state and has no information available online other than a phone number that doesn't work. I called motor vehicle and the lienholder/lender is listed on the title. I'm not sure what to do...

 

[Taxing Matters]

The loan is an asset held by someone, even if the lender is out of business. As part of going out of business it would liquidate (sell) its assets, including its loan portfolio, to someone. Whomever the loan is transferred to has the right to collect on the loan under the same terms and conditions of the contract with the original lender. So the issue is find out who that person/entity is that holds the loan currently.

 

[quincy]

What is the name of your state? Delaware

My daughter purchased her first car independently March of 2019. Her paperwork lists a lending company that in an entity search I have found as active and is a subsidiary for another company. She has never received any information on the lender by mail. She has been going into the dealership and making payments with cash and has kept every receipt. She went into the dealership to make her usual payment and was told they can no longer accept payments there. The previous owner of dealership had sold the dealership in an asset only sale. They gave us a paper with a phone number to call. I called for her and the woman I spoke to gave me a PO box to mail payments to. She told me the lender that's on her contract has gone out of business and they are working on finding a new lender for her loan which could take about 3 months. She said to just continue sending her payments. I am wary of sending payments to a PO box. We have received no written letters that the dealership has closed and nothing about the lender being out of business. The dealership is showing as an inactive entity as of 2/16/20 due to having no assigned registered agent. I am filing a complaint with the consumer protection unit of the attorney general because I feel like something isn't right. Can this company still collect money from her? The lending company is in another state and has no information available online other than a phone number that doesn't work. I called motor vehicle and the lienholder/lender is listed on the title. I'm not sure what to do...

I would be wary of sending payments to a PO Box without knowing more.

Could your daughter refinance the car through another (reputable) lender?

 

[nlauser1]

The loan is an asset held by someone, even if the lender is out of business. As part of going out of business it would liquidate (sell) its assets, including its loan portfolio, to someone. Whomever the loan is transferred to has the right to collect on the loan under the same terms and conditions of the contract with the original lender. So the issue is find out who that person/entity is that holds the loan currently.

The lie holder is a company (dba) another company. The phone number for the dba and parent company are not working. The address for the subsidiary is for a office space currently up for rent and the address for the parent company is actually flor a property management company that deals in building contractors and lawn maintenance. Seems like just a shell business.

 

[nlauser1]

I would be wary of sending payments to a PO Box without knowing more.

Could your daughter refinance the car through another (reputable) lender?

I’m going to have to look into this.

 

[quincy]

I’m going to have to look into this.

Your daughter might want to consider setting up a special bank account to hold her car payments until she gets the matter resolved. If she does this, she would want to send a letter to the PO Box address that was given her, notifying the owner of the PO Box that car payments are being held in escrow and will be forwarded once she is notified by mail of the new lien holder.

 

[LdiJ]

What is the name of your state? Delaware

My daughter purchased her first car independently March of 2019. Her paperwork lists a lending company that in an entity search I have found as active and is a subsidiary for another company. She has never received any information on the lender by mail. She has been going into the dealership and making payments with cash and has kept every receipt. She went into the dealership to make her usual payment and was told they can no longer accept payments there. The previous owner of dealership had sold the dealership in an asset only sale. They gave us a paper with a phone number to call. I called for her and the woman I spoke to gave me a PO box to mail payments to. She told me the lender that's on her contract has gone out of business and they are working on finding a new lender for her loan which could take about 3 months. She said to just continue sending her payments. I am wary of sending payments to a PO box. We have received no written letters that the dealership has closed and nothing about the lender being out of business. The dealership is showing as an inactive entity as of 2/16/20 due to having no assigned registered agent. I am filing a complaint with the consumer protection unit of the attorney general because I feel like something isn't right. Can this company still collect money from her? The lending company is in another state and has no information available online other than a phone number that doesn't work. I called motor vehicle and the lienholder/lender is listed on the title. I'm not sure what to do...

If a company went out of business the loan would be considered to be an asset of the business and the company would look to sell the loan to another lender. In the meantime, they would want to continue to collect payments. So, that part of it does not seem unusual to me. However, what seems highly unusual would be for them to NOT put something in writing to the debtors. Therefore I would advise your daughter to demand that the explanation and instructions be put in writing (snail mail not email or text).

 

[FarmerJ]

I didn't see anyone suggest this but perhaps if your daughter doesn't have a checking account she should so when she mails payments for this car she can send them via certificate of mailing so she has proof of where it was sent .

 

[xylene]

I would consider contacting the approptriate dealer regulatory agencies and the AG, if these were normal times.