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WCEB120432

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



I had a loan through a bank in Ohio, I ended up losing my job, and gave the loan up for voluntary repossession. I was told, before hand that I would be charged after auction for the remaining balance of the loan, which they could re-work into a personal loan to help my credit, so I agreed, handed them the keys and that was that. Three months later, the car is still not up for auction, I have yet to receive any paperwork regarding it, but worse, they have been reporting delinquent payments for the past three months even though I gave it up before the first months missed payment. They are now telling me that I'm responsible for paying on it until it goes to auction, even though nowhere in my loan documents it says that I may be or will be required to do so. I need to know the legality of this practice, because frankly it makes no sense to be required to make a payment on a vehicle I no longer possess, unless I know what left I owe on it. And aside from that, if I was able to make the payments in the first place, I wouldn't have had it repoed. Any replies would be grateful.
 


What is the name of your state (only U.S. law)? Ohio
I had a loan through a bank in Ohio, I ended up losing my job, and gave the loan up for voluntary repossession. I was told, before hand that I would be charged after auction for the remaining balance of the loan, which they could re-work into a personal loan to help my credit, so I agreed, handed them the keys and that was that. Three months later, the car is still not up for auction, I have yet to receive any paperwork regarding it, but worse, they have been reporting delinquent payments for the past three months even though I gave it up before the first months missed payment. They are now telling me that I'm responsible for paying on it until it goes to auction, even though nowhere in my loan documents it says that I may be or will be required to do so. I need to know the legality of this practice, because frankly it makes no sense to be required to make a payment on a vehicle I no longer possess, unless I know what left I owe on it. And aside from that, if I was able to make the payments in the first place, I wouldn't have had it repoed. Any replies would be grateful.
What does your loan agreement say? Does your loan agreement say anything at all about "voluntary repossession"? The statement that I put in bold is the crux of the matter. But rephrase the second half of that sentence the other way around. Does your loan agreement say that if you give the car to them as a "voluntary repossession" then you will NOT still be responsible for making the monthly loan payments until it goes to auction? If the agreement doesn't say that, then it would seem to me that you are responsible for each month's payment - no matter if the car is totaled in an accident, or stolen, or forcibly repossessed, or voluntarily repossessed. Unfortunately, it sounds like maybe they told you only half of the story (ie. that you will be charged after auction for the remaining balance of the loan), but it sounds like they didn't tell you that you would still owe monthly payments on the loan until the car was sold at auction (and of course they didn't emphasize that they control when or even if that ever happens).
 

WCEB120432

Junior Member
The loan agreement says nothing of monthly payments at all after a repo, even under the forced or voluntary repossession section, it had the same repercussions as a forced repo, the only difference being, with Voluntary (if I brought the car to them) I wouldn't incur fees such as towing and such. That's why I'm confused, I'd be willing to let it go, had it just been a repo on my credit, but now they are telling me they can hold the car for as long as they feel without taking it to auction and unless I keep paying, it'll hit my credit. What's worse is, I planned on paying the remainder in full, but I couldn't and still can't see paying on a balance that doesn't have a definite amount to it. (I owed 8500 on the car after repo, if I paid 6000 on it, who's to say that's not too much, or too little?) I'm just not familiar with state laws regarding this, and I can't seem to find anything online, nor do I really know what to search. I just re-read and missed a crucial part, the loan document does state that I'm responsible for paying the remainder IN FULL after the car is sold in auction. Nothing more, nothing less.
 
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TigerD

Senior Member
What does your loan agreement say? Does your loan agreement say anything at all about "voluntary repossession"? The statement that I put in bold is the crux of the matter. But rephrase the second half of that sentence the other way around. Does your loan agreement say that if you give the car to them as a "voluntary repossession" then you will NOT still be responsible for making the monthly loan payments until it goes to auction? If the agreement doesn't say that, then it would seem to me that you are responsible for each month's payment - no matter if the car is totaled in an accident, or stolen, or forcibly repossessed, or voluntarily repossessed. Unfortunately, it sounds like maybe they told you only half of the story (ie. that you will be charged after auction for the remaining balance of the loan), but it sounds like they didn't tell you that you would still owe monthly payments on the loan until the car was sold at auction (and of course they didn't emphasize that they control when or even if that ever happens).
Respectfully, this is noise.

Ohio has adopted the UCC as R.C. § 1309
Voluntary repossession is meaningless. Of course you returned the collateral. They were going to take it anyway.

Once a vehicle has been repossessed, the creditor must sell or dispose of it in a "commercially reasonable manner." The law requires that the creditor give notices to the debtor. A notice of default and the right to cure must be sent to the creditor within five (5) business days from the repossession. This notice sets out the amount that must be paid if the debtor is seeking a return of the vehicle. The debtor will be required to pay past due installments, late charges, reasonable expenses and a deposit.

At least ten (10) days before sale, the creditor must send another notice. This notice states the time and place of the sale, the minimum price for the vehicle and that the debtor may still owe for the vehicle after the sale. This notice can be sent at the same time as the notice of default. There are some defenses to a sale if these requirements are not followed.

The vehicle must be sold for a reasonable price. If the vehicle is sold at public auction the sales price will be presumed to be reasonable. Proceeds from the sale must be used to pay off the loan. If the proceeds do not fully pay off the loan, then the lender may file a court action to collect the rest of the loan. You should not be making payments after the repossession before the sale. Waiting three months to sell the car creates a colorable argument that the sale is not being conducted in a commercially reasonable manner since the longer they wait the more the value of the car drops.

You should consider discussing the issue with an attorney experienced in consumer rights and UCC.

DC
 

WCEB120432

Junior Member
Respectfully, this is noise.

Ohio has adopted the UCC as R.C. § 1309
Voluntary repossession is meaningless. Of course you returned the collateral. They were going to take it anyway.

Once a vehicle has been repossessed, the creditor must sell or dispose of it in a "commercially reasonable manner." The law requires that the creditor give notices to the debtor. A notice of default and the right to cure must be sent to the creditor within five (5) business days from the repossession. This notice sets out the amount that must be paid if the debtor is seeking a return of the vehicle. The debtor will be required to pay past due installments, late charges, reasonable expenses and a deposit.

At least ten (10) days before sale, the creditor must send another notice. This notice states the time and place of the sale, the minimum price for the vehicle and that the debtor may still owe for the vehicle after the sale. This notice can be sent at the same time as the notice of default. There are some defenses to a sale if these requirements are not followed.

The vehicle must be sold for a reasonable price. If the vehicle is sold at public auction the sales price will be presumed to be reasonable. Proceeds from the sale must be used to pay off the loan. If the proceeds do not fully pay off the loan, then the lender may file a court action to collect the rest of the loan. You should not be making payments after the repossession before the sale. Waiting three months to sell the car creates a colorable argument that the sale is not being conducted in a commercially reasonable manner since the longer they wait the more the value of the car drops.

You should consider discussing the issue with an attorney experienced in consumer rights and UCC.

DC

How strong of a case would you think I have, since I've never received any letters, or notices. And the fact that it's been 3 months and 8 days. I plan on talking to an attorney tomorrow, but should I notify the CEO of what's happening before hand to see if he'd be willing to fix it, or should I go straight for an attorney? I've never had this issue before, my credit was nearly 740 before this all happened, and I am only 19. I'm not sure how to go about it all to be honest. And advice would be helpful
 

TigerD

Senior Member
How strong of a case would you think I have, since I've never received any letters, or notices. And the fact that it's been 3 months and 8 days. I plan on talking to an attorney tomorrow, but should I notify the CEO of what's happening before hand to see if he'd be willing to fix it, or should I go straight for an attorney? I've never had this issue before, my credit was nearly 740 before this all happened, and I am only 19. I'm not sure how to go about it all to be honest. And advice would be helpful
You should talk to an attorney.
Or you could talk to the bank. They might be interested in giving you the car back and setting up a different payment plan.

I'm not sure what you think the case is. Your argument is that they could have sold the car for more if they acted promptly. Your damages are the difference between the value of the car at repossession and the value of the car as established at the auction - which may not be much.

DC
 

WCEB120432

Junior Member
You should talk to an attorney.
Or you could talk to the bank. They might be interested in giving you the car back and setting up a different payment plan.

I'm not sure what you think the case is. Your argument is that they could have sold the car for more if they acted promptly. Your damages are the difference between the value of the car at repossession and the value of the car as established at the auction - which may not be much.

DC
Thanks, I'll try for both options. Honestly as far as I'm concerned I just want the blemish of the 90 day delinquent payment off my credit report, as that's on there for 7 years. I'd be content with that, But assuming the CEO is as stubborn as the people he hired in, I most certainly want to keep an attorney, just in-case. I appreciate all the help!



EDIT; I had just talked to the bank, at the end of this month's cycle the 90 day delinquency will no longer be on my credit, further more there will be no repo at all on there as well. They also had said that, if I felt the want, I could come get the car for 910 dollars, as that's just what I owed for the past three months and to get a month ahead. If it does go to auction, they offered a delinquency which would get the remainder balance of the car wrapped up into a loan that'll have a lower monthly payment and interest rate. I thank everybody for advice and help!
 
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