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Someone I know owes his credit card company a few thousand dollars, this person is single, no assets, no property/checking acct. nothing only his
truck which he paid cash for.........can the credit card company that he owes money to put a lien on the truck......the vehicle is worth a few thousand dollars, not close to what he owes? I say they have to get a court order in order to do this and he has to be served with some kind of paper telling him so......am I giving this gentlemen wrong advise? Thanks!
First, they have to prove without a doubt that he fully owns that truck. Then, they have to get a judgement against him. Then, they have to petition the court to put a lien on the vehicle for the judgement. Yes, they can do it, and if inspired to do so, they will do it. Or, if he is a good person, he'll take a loan out against the truck and pay off the credit card (depending on the age of the account, I might try to settle it for a % of the value, then submit the letter of settlement to the bank loaning the money). They can also go after any tax return he may get from either state or irs.
He should contact someone at the credit card company and settle for a % of teh debt on a payment plan. He must get this in writing before starting to make the payments and should send them checks rather than let them have access to his account to withdraw the money automatically.
OK.......he tired to tell them he has no money......no job........he wanted to set up a payment plan with them, say $100 a month, they said no, that they wanted the whole amount in one piece........he tired to get a loan, since he has no credit anywhere, he can't get a loan......he works daily and is paid cash each day, so they can't attach nothing. The truck is worth about 5,000
if that and he owes way more than that. Bank of America has tacked on thousands of dollars worth of fees, this kid will never be able to pay it off, they since have it in a collection agency and they won't work with him, all they do is harrass him and threaten him, they said that Bank of America does not want a donation of $100 a month. He's just a kid.....20 something. Would chapter 11 or bankruptcy do him any good?
Last edited by Songbird42; 07-18-2007 at 02:28 PM..
Reason: left out information
OK.......he tired to tell them he has no money......no job........he wanted to set up a payment plan with them, say $100 a month, they said no, that they wanted the whole amount in one piece........he tired to get a loan, since he has no credit anywhere, he can't get a loan......he works daily and is paid cash each day, so they can't attach nothing. The truck is worth about 5,000
if that and he owes way more than that. Bank of America has tacked on thousands of dollars worth of fees, this kid will never be able to pay it off, they since have it in a collection agency and they won't work with him. The whole amount of nothing. He's just a kid.....20 something. Would chapter 11 or bankruptcy do him any good?
Bankruptcy might require him to get a vehicle that is valued for a lesser amount to help pay off the debt, but don't quote me on that. I know bankruptcy court cannot make you sell off your means of transportation, but they may require you have less valuable assets. If the debt is as large as you are indicating, ch 11 may be in his best interest if he is ready to start fresh... but remember, if he lies to the federal court and is found out about, he will be punished (for instance, claiming you don't have a job because you work under the table, but they find out otherwise... but, if you claim you do have a job, you have to claim how much you make and then put yourself in a situation that could tip off the irs because the irs will get your bankruptcy information).
What I would suggest to him is give written notice to the cc company 1. to cease and desist contact, and 2. what he can pay every month and when he'll pay it, and then pay what he can afford every month. It is basically the same as what he'd do under ch 11, but this wouldn't hurt his credit nearly as much because it would show his intention to pay back without court intervention. The sooner he makes this deal, the better. The CC company has fewer legs to stand on with a judgement and lien if he can show proof that he is repaying the debt. Remember... the CC company CANNOT refuse any payment made on the account --- the collectors will tell him that a certain amount is not acceptable, but they also work off comission. He will only be granted a settlement if he can be paid back within a certain time period (usually 30-90 for the full settlement amount). It is extremely important he keeps all written records of paying the debt.
As for the loan... usually if a consumer can prove ability to pay back (pay stub, proof of cash payment) and has collateral, they can get a loan. Owning the truck outright is in his favor, because the loaning bank will then attach a lien to it in exchange to give him money for his debt. Once he has 6 months worth of payments history, he can take that proof to the bank to get reconsidered for a loan to payoff the full amount if it is as much or less than the value of the truck.
He should tell them that even if they sue him and win, they will not get anything because he has nothing, and that if they want anything from him they should arrange a payment plan.
Different states have different laws I assume but years ago when I was in my 20's and lived in California I owed money to a credit card company and one day I went to go somewhere and my car was GONE. They had come and towed it away. I had to pay them off to get the car back and then on top of that had to pay HIGH impound fees. Like mentioned before, they can also garnish his wages no matter how little he makes. It isn't worth it, he needs to find a way to pay it off.
Different states have different laws I assume but years ago when I was in my 20's and lived in California I owed money to a credit card company and one day I went to go somewhere and my car was GONE. They had come and towed it away. I had to pay them off to get the car back and then on top of that had to pay HIGH impound fees. Like mentioned before, they can also garnish his wages no matter how little he makes. It isn't worth it, he needs to find a way to pay it off.
They can't garnish wages unless they can prove without a doubt that he is working and where he is working. Without verification, they can't touch his wages. Working under the table is in his favor for that reason and that reason only.
I have never heard of a collection agency being able to take something, like a car, unless they have a lien on it.... I know states have different laws and such, but they can't deny you transportation to go to work....
They did not have a lien on my car. The car was no even purchased at all with the card. I was behind about 2-3 mos. and had no warning at all. It was a Montgomery Ward credit card. I went to my car to go somewhere and no car. There was a note in the wall in front of where I parked as to why it was removed and a number to call.
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Yes, they can. Will they? That depends.
