Seizing one's car

[treehugger1]

B2School, I have heard that Ny has some very different statutes when it comes to exemptions outside of BK.

I'm not trying to take this thread off topic, but I have recently learned of all kinds of strange twists related to autos in my state. One very weird one is that if the deficiency (loan balance after repo sale) is under $2500, no lawsuit can proceed here.

I'm in a bit of a quandary myself. I have a 2000 Subaru that has a ruined front differential. The center diff is also suspect. The costs to replace these, doing the work myself, is $1K - $1.5K. I owe $3800 and I'm considering letting the lender know where the car is and requesting they pick it up.

I'm guessing that the car will sell for about $4k. One would only notice a bad diff if they drove the car hard for 100 -2000 miles. Even if they sold the car for $3k and included the repo costs, I might be financially better off. My $140/month payment would end, and I would be free of one more headache.

I don't know what happens to the loss due to deficiency, if I walk away, and the final difference is under $2500.

[backtoschool]

My guess is that some jdb will buy the deficiency debt for pennies on the dollar and tries to collect on it via means other than lawsuits.

[tobee43]

tobe, you mentioned earlier in this thread that if one did not declare BK, then exemptions do not apply. This is not true. Almost all states have exemptions against judgment collections. In my state, the exemptions are the same as those used for BK. In Oregon, the state does not recognize the federal BK exemptions. As a result, the stste exemptions against seizure are the same ones used in a BK.

In terms of automatic liens against a vehicle, this varies from state-to-state. In Oregon, a judgment can lead to an automatic lien against any real property the judgment debotr has in the county. Vehicles are not considered real property. I see plenty of repo's here, but I seldom hear of someone having their car taken to satisfy a judgment. We have a $3000 vehicle exemption. I suppose this explains why there are so few vehicle seizures here, outside of repo's.

tree, i guess this is so confusing since it does vary from state to state...


in the state we used to live in, if one did get the writ on the car...it would NOT be exempt. now in oregon, it most likely and is different. and, i guess...and now this is ONLY because i actually know a law firm that grab up someones van against the judgment ...and that poor guy didn't get his van back until he came up with %100 if the money PLUS cost and fees...they were MEAN!! but then again there are most likely more bodies with cement shoes on in the hudson river than all the rivers in oregon!! LOL!!!

[tobee43]

I agree with treehugger1. I would add however that some states have different exemptions for judgments than they do for bankruptcy. New York does not recognize federal exemptions but has different exemptions for judgments than for bankruptcy. (this is due to the horrible nyc Marshalls that New York has to collect on judgments).

Many states allow automatic liens on automobiles if they are owned outright. Michigan allows fully owned vehicles to be seized to pay judgments for example.

you got that right B2S....i know someone for 30 working in the nyc marshalls office and they will take everything but your kids....anything...your unemployment insurance...ANY possession possible...

[backtoschool]

When I lived in nyc, I had to deal with the Marshall's office and it was horrible. The judgment ended up being vacated because the state's attorney general won a class action suit against the sewer service law firm that falsely served me, but while the judgment was in effect, I would get all sorts of nasty letters from the Marshall. He even did research to levy my bank account, but by then, I was banking online at a CU in California.

[GoingDown]

I have a an 8 year old car with 150K miles. If a writ of execution has been entered against me for a judgment of $3100 (not related to the car), how does the debtor seize my car ( I do not have title, but will soon...). Can the sheriff just show up with the writ of execution and take my car?

Although it does happen from time to time, this is a very ineffective way for debt collectors to get a judgment paid off, and so it is very rare.

A car that has 150,000 miles on it, is probably not worth $3100, according to the Kelly Blue Book values. So, if they took your car it would be for spite rather than a sound business decision. They want to make money so they can stay in business, and if they went around doing stuff like this for very long, they would go out of business.

They would have to get a judgment, find out that you had a car, put a lien on it, go back to court and get a court order to seize your car, pay the sheriff to serve the writ, pay a tow truck company to tow your car, pay someone to store your car, pay for insurance, pay for someone to auction your car, and then pay you the exemption amount for your vehicle, and then whatever was leftover, if anything at all, is all their's to keep. Probably a few pennies if they are lucky. Does that sound like a good business decision?

And if you still owe money on your car, they have to pay off the car loan so the person who buys the car at auction will have clear title to your car.

So, it rarely happens.

I wouldn't worry about something that rarely happens.

I have had a judgment against me for years and years, and I still have my truck. They have never made any effort to take my truck from me, and I doubt that they will ever do anything like that to me. The vehicle exemption in Arizona is $5000, so I would just go out and get myself another old truck to drive around with the money they gave me for my truck. I might even get a nicer one than the one I have now.

[GoingDown]

you got that right B2S....i know someone for 30 working in the nyc marshalls office and they will take everything but your kids....anything...your unemployment insurance...ANY possession possible...

Wow! It makes me glad I live in Arizona where this kind of stuff rarely happens.

[GoingDown]

tree, i guess this is so confusing since it does vary from state to state...


in the state we used to live in, if one did get the writ on the car...it would NOT be exempt. now in oregon, it most likely and is different. and, i guess...and now this is ONLY because i actually know a law firm that grab up someones van against the judgment ...and that poor guy didn't get his van back until he came up with %100 if the money PLUS cost and fees...they were MEAN!! but then again there are most likely more bodies with cement shoes on in the hudson river than all the rivers in oregon!! LOL!!!

It seems like the Western states have a very different mindset when it comes to judgment collection remedies available. In Arizona, the main things debt collectors go after are wages, checking accounts, and puting a lien on real estate. Everything else is difficult and expensive for them.

[Bell30656]

When they take that car with a low value they aren't doing it for spite, they are doing it in hopes that you will cough up some money to get the car back. They don't want the car they want your money.

[backtoschool]

When they take that car with a low value they aren't doing it for spite, they are doing it in hopes that you will cough up some money to get the car back. They don't want the car they want your money.

I totally agree with this. Usually it's a last ditch effort to get some money when wage garnishments and bank account levies are not possible or not fruitful. Many people will pay to get their car back.

[GoingDown]

But it is a very desperate move on their part, and it is a big risk for them because they probably still won't get paid because the person with a crappy car probably still can't pay them what they owe them, and because it is a crappy car, they might be better off letting the debt collector keep that car and just go out and get another car to replace it.

And I will say this, I have never heard of this sort of thing happening in ARIZONA (it may be different in other states), other than for spite from an ex-spouse or for the collection of a wrongful death lawsuit, BUT NEVER FOR A CONSUMER CREDIT CARD DEBT.

It just doesn't make good business sense for a debt collector to spend so much money trying to collect a debt from someone who obviously can't afford to pay them back. They have to move on to other debtors who are easier to collect from so they can stay in business themselves.

So, again I say, this is a very rare thing, and not really worth worrying about.

[backtoschool]

But it is a very desperate move on their part, and it is a big risk for them because they probably still won't get paid because the person with a crappy car probably still can't pay them what they owe them, and because it is a crappy car, they might be better off letting the debt collector keep that car and just go out and get another car to replace it.

And I will say this, I have never heard of this sort of thing happening in ARIZONA (it may be different in other states), other than for spite from an ex-spouse or for the collection of a wrongful death lawsuit, BUT NEVER FOR A CONSUMER CREDIT CARD DEBT.

It just doesn't make good business sense for a debt collector to spend so much money trying to collect a debt from someone who obviously can't afford to pay them back. They have to move on to other debtors who are easier to collect from so they can stay in business themselves.

So, again I say, this is a very rare thing, and not really worth worrying about.

It happened to someone I know in Michigan. My friend's boyfriend had an older model Mercedes that was owned in full. (It was a hobby car for him and was not his primary car) He had a completely unrelated debt from years ago that there was an old judgment on. They came and towed the Mercedes from the driveway in full view of all the neighbors. He just let them keep it.

[BrokeIn2010]

I think I mentioned it up-thread, but typically (as it's been explained to me, and at least in TN) they've be a discovery hearing/meeting where you declare your exemptions and value. So in theory, you'd be able to "protect" a car that's value was below the state/federal exemption line.

[GoingDown]

It happened to someone I know in Michigan. My friend's boyfriend had an older model Mercedes that was owned in full. (It was a hobby car for him and was not his primary car) He had a completely unrelated debt from years ago that there was an old judgment on. They came and towed the Mercedes from the driveway in full view of all the neighbors. He just let them keep it.

I would really love to know what the accountant had to say after that transaction. I'm assuming this old car wasn't worth much, so after all the costs involved, the judgment creditor probably received a few pennies if they were lucky. If not, they may have easily spent more taking his car than they got for it at auction.

Did your friend ever receive a statement after the auction, showing how much was applied to the judgment?

And I am wondering about the method they used to obtain the vehicle... did they do it the legal way, with a sheriff?

Or did they just send out some repo men to ask for the car, and the person didn't realize what they were doing was illegal, and just voluntarily gave it to them? This seems to be the method that is used by unethical zombie debt collectors. They don't bother going back to court to get a writ and hire a sheriff to serve the writ, they just show up and hope the debtor caves in and either coughs up money or hands over the car and then later coughs up money to get the car back.

I personally would not voluntarily surrendor my truck unless a sheriff was executing a writ, and I would follow up by claiming my state of Arizona exemption for vehicles in the amount of $5000.

But as far as I know, this stuff just does not happen in Arizona. And it sure doesn't make any good business sense to do this. If every collection agency acted this way, they would all go out of business. They are in business to make profits, not to spend money and time going after old cars that have very little monetary value.

The reason I wonder about this stuff is because it would be a great rumor for creditors and debt collectors to spread around to scare debtors into voluntarily paying them-- like the old rumor of debtor's prisons.