Am I still liable for the remainder of my auto loan if the bank sold it earlier then it said it would?

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Am I still liable for the remainder of my auto loan if the bank sold it earlier then it said it would?

I voluntarily gave up the car last month and was told that I would have until the end of the month to either find someone to take over the loan or let it go to auction. It went to auction mid-month and now they say I have to pay the remainder even though they went against what they had told me.

Asked on June 7, 2012 under Bankruptcy Law, Tennessee

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 9 years ago | Contributor

You are most likely liable.

The first issue is, unless you only gave up your car because they had said you would have until the end of the month, there would have been no enforceable agreement; that is, if you gave up or indicated you would give up your car first, and after doing so, they said that you'd have some time to find someone to take over the loan, that would just have been a "gratuitious promise" by them, and gratuitious promises are not legally enforceable. To be enforceable, there must have been an agreement formed before you acted or indicated your intention to act vis-a-vis the car.

Second, even if there were an enforceable agreement, while it would technically be enforceable--they'd have to give you the extra time--if you do not have anyone who is willing to take over the loan, you have not been damaged in any way by the lender accelerating the sale: that is, if you don't have anyone who is willing to step forward and take over the loan, it doesn't matter whether the car went to auction mid-month or end month. Without any impact on you from the breach of the agreement to give you more time, they can still most likely hold you liable.


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