If I took out a title loanfor a car that broke down a few weeks before it was towed, what are my rights?

UPDATED: Sep 13, 2011

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If I took out a title loanfor a car that broke down a few weeks before it was towed, what are my rights?

I took out a title loan on a car a few weeks before it was towed. The towing company said that they disposed of the car (I’m assuming that means they sold it for scrap, parts or repair).1. Is it legal that they sold it with a lien on it from the title lender? 2. Do I still owe the title lender since the car is broken down and has been sold by the towing company? 3. What happens if I don’t pay back the title loan (will it effect my credit or will the debt be owed by the seller)?

Asked on September 13, 2011 under Bankruptcy Law, District of Columbia


FreeAdvice Contributing Attorney / FreeAdvice Contributing Attorney

Answered 11 years ago | Contributor

If you purchased a vehicle where you took a loan to purchase it, you need to carefully read your loan documents in that the loan's terms set forth the obligations that you owe the lender and vice versa concerning the automobile in the absence of conflicting state law.

You need to ascertain what happened to the vehicle that you bought. Meaning, was it placed in an impound lot and the lender who has a presumed security interest in it was notified of its whereabouts?

Unless you can ascertain what happened to the vehicle, I will not be able to answer your questions with much specificity.

Assuming the car was completely disposed if and not returned to the lender having a security interest in it, you are obligated to the lender for the balance of the loan. If you cannot pay back the lender what is owed as agreed to, your credit rating will be negatively affected.

Good luck finding your vehicle.

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