Parents financed our car in their names. They passed away, a balance remains. Can the bank repossess the car?

Question

My mom-in-law & dad-in-law put $7,000 down on a SUV for me & my husband and completely financed the SUV in their names.Me and my husband didn't have the credit to finance it in our name.My dad-in-law came into a large settlement & gave money to his 3 sons to go towards cars.My dad-in-law was very ill at the time we finaced the car at the dealership.The car salesmen knew that even though my in-laws were financing the SUV, me and my husband (their son) would have possession of the SUV.My dad-in-law financed the SUV because he wanted his 3 grandkids to have a safe and reliable vehicle.Me and my husband have made ALL the monthly payments on the SUV for 4 years, the insurance has always been in my name and we always paid for the title/renewal sticker. At the time the SUV was financed me and my husband traded in our Dodge intrepid which did have a bit of balance owed on it in addition to the $7,000 I mentioned previously. Both passed away now the bank wants to reposses it, can they?

There was no will. We are in the process of completing a probate. My husband had and still has power of attorney. No exicuctor was named for the estate which just includes a mortgage free home and two paid off cars. However, the power of attorney document also explicitly states that if there ever comes a time when an executor needs to be named then my dad-in-law wishes my husband to be named as the executor. I would also like to note that we have made all the payments and were on time up until they told us they were going take back the SUV. We argued with the bank several times (our first several attempts were very proffesional until we just finally broke and got upset) and all times we got no where. We have been getting different information from different bank reps ranging from you guys can keep the car - just make the payments, to the car bill will be cleared once we verify gap insurance coverage and then the one where even after we made our payment we were told turn in the SUV.

Answer 1

Unless the vehicle is paid in full with the settlement of the estate of the deceased, then yes, they can repossess. The people that owe the money are dead, and therefore can no longer have a loan.

When someone dies, if they have debts, any assets they have are supposed to pay off those debts. If the debts are secured by property, that property has to be returned to the lender unless the debt is paid in full.

If they paid $7,000 down, and you've been paying on the vehicle for 4 years, there shouldn't be very much still owed on it.

You and your husband need to find a way to pay for the vehicle in full, or you need to refinance it so that you have the loan in your name.

Answer 2

I don't think they can if you are making the payments on time every month, but if you are at all past due, then yes. I would consult an attorney for some free advise, most will give free consultation just to find out your options. You may have to refinance the car under your name or someone else that is living. Technically the car still belongs to the bank until it is paid off, the bank just want to make sure they get their money. Since your parents died, the bank is trying to claim back the car, you need to call them and ask them your options I am sure they will be willing to work with you as long as they get their $$, repossessing the car will result in them losing money so I am sure there is a way.

Answer 3

Yes they can, since the car is in the name of the deceased. Regardless of the fact that you are current on the payments, they assume that since the title holder has died, payments will cease.

You need to explore the possibility of having the dealership help you re-title the car in your name. This could be a problem for you though, as it will need to be refinanced and your credit may not allow that to happen. If that's the case, the only thing you could to do prevent a repossession is to pay the balance in full and have clear title to the car.

Are you going to be receiving any inheritance, as that would be your best bet to either pay off the balance on this car or let the bank have it back and purchase a used car with cash.

Answer 4

YES...the bank can repossess the vehicle if you are behind in payments. If you are current on the vehicle, they cannot repo. the car unless the probate laws in your state give them the right. Also, read the financing contract carefully to see if there is a clause regarding death.
If you have made payments for 4 years, it sounds as if there may be equity in the vehicle. If so, I would argue that the bank cannot repossess the vehicle as long as the terms of the contract have been complied with. I would posit that it would represent equity of your father-in-law's estate which should properly be administered by a probate court.
Did your father-in-law have a will? If so, I would encourage you to contact his attorney. I'm sure he knows far more about the probate laws in your state than I do.

Answer 5

Unfortunately, the bank's agreement with your in-laws, not you, so yes, they are within their rights to reposses the SUV since the holders of the note are dead.

If there isn't enough estate to pay the note off, and your credit still isn't good enough to assume it yourself, then you may not have any options.

First, talk to the account manager who is handling the loan. Ask if there is any way you can assume the payments. You may need to find a co-signer (i.e. one of your husband's brothers) for the bank to allow this.

Second, find out if there is any money in the estate to pay the note off. You may be able to work something out with your husband's brothers, where you borrow the money from them to pay off the bank.

Somebody has to pay the bank - or they will take the SUV. I'm sure they'd rather have their money, as reselling a used SUV is always a loss for them, so you have a BIT of leverage - but don't expect them to bend over backwards for you. Be polite and professional at all times, and ask for their advice on how to make this work out.

Answer 6

Negotiate with the bank. Chances are, they really do not want the vehicle, they just want to make sure it is being paid for. They might possibly finance it in your names, or allow you to sell it. If there is no equity in it, it might be worthwhile to let them have it.

The bottom line is yes, they can repossess it. It is not financed in your names, and the person they loaned the money is deceased.

Check with an attorney to find out what rights you have, if any. Some states have a winding down period, in which creditors are not allowed to take any action on the property of the decedent. This gives families time to wind down the affairs, settle debts, etc.

Answer 7

Of course they can. Irregardless of the personal knowledge of the sales people, the legal contract is between them and your in laws. And if there is a balance owing, that is what is expected. After 4 yrs the balance should be way down... your option is to get it paid off. Find a lawyer for a consultation (if there is none handling the estate), and see if you cannot negotiate with the dealer/bank, as to getting you time to get things in order. But without being paid for, the car would go back.

Answer 8

Yes...it's not your car..the owners passed away and the bank cannot collect from them....unless they Co-signed and the car is in your name and you have been making payments regularly without a problem....then that's a iffy thing....they may think the contract is void because there's no guarentee on the loan anymore....you may have to talk to an attorney regarding contracts.

Answer 9

whose name is on the title? If in-laws then yes. If yours ,and you're making the payments, no, they can't.

Answer 10

I guess you should have made the payments.