On Jul 26, 11:37 am, jmk0317 <jenna_ku...@yahoo.com> wrote:
> My husband sold his truck last June to a man he was friendly with. The
> man did not have all of the cash & we were in a rush to sell it,
First mistake. Should have let friend go to a bank or other source to get the money if he didn't have cash in hand. Why would you want to take on the headache of being his banker? But you know that by now already.
> so we
> allowed him to make payments and had him sign a contract.
I assume this is a simple agreement you drafted yourself and that it said nothing about several terms usually included in professionally-drafted contracts of this nature. Frex, you don't say anything about whether, in your "rush" to sell, you thought to either (1) give him a conditional title, i.e. by filing a statement of lien (or whatever your state's DMV calls them) with the titling authorities, indicating that you had a purchase money security interest in friend's new truck, with all the legal rights thereto appertaining in your role as financier, or (2) simply held onto the title certificate yourself, even though you turned over the keys to friend, until friend came up with the money in full by your deadline. If friend failed to come thru, you could then simply have taken the keys back, applying the money he did give you as representing the rental value of the vehicle during the time friend possessed and used it, if that was what your contract provided.
IMO having the enforcement power of the law behind you by filing a formal security interest is the better way to go, but the self-help alternative of basically a "lease to own" type contract may work almost as well for some people especially in a friend-to-friend situation, as long as both parties are clear about the consequences of a failure of payment in this situation from the beginning. The main glitch I can think of off the top of my head would be your potential liability, if friend gets in a wreck or hurts somebody with the truck that is still titled in your name. Of course, you also needed to have a term in the contract requiring friend to carry adequate liability insurance to protect both him and you, as well as comprehensive and collision coverage to protect you as an additional named insured lienholder, since, until he pays you in full, you still have a beneficial ownership interest in the truck.
> The contract
> states that he balance was to be paid in full by December 2006, yet we
> are still owed $1500 (I also want to point out that each month we had
> to call him and ask for the payment).
So, how many months has it been since he made the last payment? Are you surprised he stopped, after months where he only payed after being nagged?
I'm guessing the friendship part is basically kaput by now. So you have nothing to lose by pursuing legal remedies.
> At this point, what can be done?
That depends on the terms of your contract, which you don't describe here except for the anticipated payoff date. We don't have enough information to help you much.
> Is there a threatening letter that I
> can send to him?
What sort of threat do you think would help, for a guy who has ignored your monthly nags for, oh, at least 7 months now (longer, if that $1500 represents more than one month's missing payment)? Just sue the guy in small claims and be done with it.
> Can I cc the credit bureaus?
Not a good idea IMO unless your finance agreement was in the usual professional form and you know what you're doing, preferably with paid legal advice guiding you. You don't want this guy to turn around and sue you and hubby for libel if you screw this part up and defame his credit.
> Can I sue?
Yes. Whether you will win is a different question, but in a small claims court context, chances are you will get a judgment for the amount of money the buyer still owes you if the facts are as you state. Keep in mind, though, that a judgment is just a piece of paper authorizing you to use legal enforcement tools to collect the stated amount, such as garnishment, putting a lien on his house, etc. It is no guarantee that the buyer will have any money you can collect, and if he is so broke he could not afford to rake together from any source the money to buy a used truck from a friend, my guess is he's likely to be pretty well judgment-proof. OTOH if he is not quite that broke, and does have any assets worth protecting, he could file for bankruptcy. There's lots of ways you could lose out on this deal especially if you neglected to perfect a legally binding security interest in the truck and if buyer now owns it free and clear of any liens in the eyes of the DMV even though he still owes you money.
> What will
> that cost me (we live in different states now)?
Oy vey. That makes it that much harder to sue him in small claims. Which one of you moved? If he's the one who moved, you can still sue him where you live, since that's where the contract took place. But you will need to have a process server in the buyer's new state actually serve him with your suit papers (unless your state allows a simpler means of service, such as certified mail). If you moved, you will probably need to hire a lawyer to represent you in your former state or else be willing to travel back there for court dates (there may be more than one) which could wind up costing you more than hiring a lawyer.
> Can I repo?
Probably not, unless you had aleady thought to put all the right language in your contract AND filed a proper form with the DMV to perfect your security interest in the vehicle as lender. If you didn't, it's too late now. Any attempt at repo now, without having jumping thru all the right hoops previously, means he could sue _you_ for a wrongful repo. Otherwise, suing him and hopefully getting a money judgment from the civil court, and then trying to enforce it through liens or garnishments after you get the judgment, is about your only valid remedy. Good luck,
--
This posting is for discussion purposes, not professional advice.
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Mike Jacobs
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