My friend allowed her car to be voluntarily repossessed. The finance company has had her wages garnished for $7,000 and she only owed $3000 on the car. If they haven't sold the car, it appears they haven't from the amount, shouldn't the car be returned to her since she is paying for it? Also, can they take her income tax return?
2006-12-05 08:48:23 · 4 answers · asked by kbt68 1 in Politics & Government ➔ Law & Ethics
I doubt if repossession costs and late charges would inflate a $3,000 balance to $7,000. Your friend's loan balance was probably higher than $3K. If your friend let her automobile insurance lapse, the bank may have added their own (expensive) insurance to protect the car.
She is entitled to an explanation.
If insurance was added mistakenly, she can have the charges removed once she proves that she kept the car continuously insured.
Chances are that if she wasn't making the car payments, she wasn't making the insurance payments either.
2006-12-05 15:42:40 · answer #1 · answered by Kennyboy 2 · 0⤊ 0⤋
Garnishments can only be issued by a court of competent jurisdiction. This means that the finance company obtained a deficiency judgment. A deficiency judgment is generally obtained after the car is sold at auction or often to a wholesaler. The price for which it is sold is often much less than even the fair market value.
Let's look at a hypothetical. Let's assume that your friend owed $3,000 on the car. They may have sold the car for $1,500. Then, they have added the costs of the repossession, court costs, attorney's fees, and possibly penalties as well.
Its not possible for the finance company to garnish without a court order, so she needs to determine the basis for the garnishment. Her employer can give her a copy of the garnishment order, and she can obtain a copy of the petition (also called a complaint in some places) and other documents from the court.
If she doesn't understand this, she needs to contact an attorney licensed in her state. For a referral, contact her state or local bar association.
2006-12-05 17:23:35 · answer #2 · answered by Phil R 5 · 0⤊ 0⤋
The finance company got a judgment against her in court, or they wouldn't be able to garnish her wages.
They sold the car, and took a loss, and she is paying for court costs, plus what she owed on the vehicle.
Yes they can take her income tax return if they got a judgment saying that they can collect their damages from it. They also have to file a claim with the IRS so that the portion of what she owes will be diverted to them before she can get any portion of her return.
2006-12-05 17:03:46 · answer #3 · answered by Anonymous · 0⤊ 0⤋
Since when can a finance company garnish wages??? Taxes and child support, yes. But a car note? My ***.
2006-12-05 16:56:16 · answer #4 · answered by Anonymous · 0⤊ 0⤋