Auto Loan Troubles

A Perplexing Problem

From June 2002 to May 2003, my husband and I had a loan with a sub-prime lender, UACC. They repeatedly harassed us and dared us find another lender willing to take on our loan.

We were able to refinance with CAP1 and did so believing that payment was made and loan transferred to new lender. Payment was made by CAP1 (actually overpaid by $114) on 5/29/2003.

However, UACC added fraudulent fees, applied payoff, reversed & reapplied, resulting in a "short" in payment. UACC claims that short was to principal.

UACC reported to the credit reporting agencies as a collection account until January 2006 when my husband's bankruptcy was discharged - then, they started reporting the balance due as a charge-off.

To complicate things further, CAP1 does not have the title (UACC holds it & claims they will do so until payment is received in full) & claims that we discharged this loan in the bankruptcy (despite the fact that we have the car still and are current with payments).

My questions are numerous...

• 1) Can UACC report this as a charge-off?
• 2)Isn't the balance due UACC dischargeable in the bankruptcy despite not being listed specifically; it was a debt that was there before filing.
• 3) Shouldn't CAP1 pay the balance due & obtain title since they are the rightful lien holder?
• 4) Should I pay balance due to UACC? (they will change charge-off to paid charge-off and release title to me.)

Also, FYI...CAP1 refuses to answer letters or calls.

Both CAP1 & UACC report erroneous information to credit reporting agencies, but refuse to correct!

Frustrating to say the least.

I am now wondering how to handle.

Barbara

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A lot of what you say doesn't make sense to me. I understand your problems, but don't understand the actions of Capital One, UACC and whoever handled the bankruptcy for you.

Did you have a lawyer when you filed for bankruptcy?

If you had a lawyer for the bankruptcy go see him. Find out why the UACC debt was not included in the discharge. It seems to me it should have been. This may be a legal malpractice matter, depending on the circumstances.

I don't think that you are correct in your assumption that an unlisted, but pre-existing debt would be automatically discharged. Bankruptcy filers can voluntarily hold back certain debts from the proceedings if they wish to.

The Capital One loan must have been a personal loan. Otherwise I do not understand why it did not insist on obtaining title. Read your contract with them carefully.

It seems UACC was within its rights is reporting your car loan as a charge off, unless your debt was truly paid in full.

If UACC holds title and won't release it without payment you will either have to pay them or sue them.

You should consult a lawyer about "predatory lending practices." It certainly seems that you have been a victim of them, if what you say is true.

Also reporting false or erroneous items to the credit agencies is against federal law, so this is another thing to talk to your lawyer about.

Don't pay off the UACC loan until you talk to an attorney. he will probably be able to get a better deal for you.

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