What to do if we bought a vehicle that has a defaulted loan on it?

We bought a four wheeler from my brother and he has not provided the title. He did not pay the balance off and now the company wants to repo it. They have been looking for it. What rights do we have? Amount was $4000. Found out he owes $8000 and not making any payments.

Asked on September 22, 2011 under Bankruptcy Law, Tennessee


SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 9 years ago | Contributor

If he never paid off the loan, the lender or financing company can repossess the vehicle; they do not lose their rights because someone sold the car without refinancing, paying, satisfying, etc. the loan.

However, if your brother sold you a vehicle but did not either tell you there was a loan on it, or told you but did not honor a representation or promise or agreement that he'd pay the loan off, and did not or could not transfer clean title to you, you can sue your brother for breach of contract and/or for fraud. You should be able to rescind the agreement--to make him take the vehicle back and return or refund your money to you. So in a case like this, you would likely not have recourse against the lender, but you would be able to take action against the seller, who did not sell you what he promised to sell you.

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