If I sold my car to a friend and allowed him to make payments but he has not finished making them, what legal rights do I have?

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If I sold my car to a friend and allowed him to make payments but he has not finished making them, what legal rights do I have?

Asked on April 21, 2012 under Bankruptcy Law, Pennsylvania

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 9 years ago | Contributor

If you are still the person on the loan or financing, you--not your friend--are responsible for making the loan payments. If you do not, you, not your friend, will face potentially being sued and having your credit damaged.

If the loan is not paid, then the lender will presumably be able to repossess the car from your friend--selling the car does not eliminate the lender's security interest in it. That will greatly complicate matters, since while you will have a cause of action against your friend (see below), he may in turn try to sue you on the grounds that you are unable to honor your obligation and actually provide him the car he bought.

You should be able to sue your friend to enforce his obligations under theh agreement (written or oral) of sale, and potentially for other losses or costs his failure have imposed on you.

This is a "messy" situation since the person obligated under the loan is not the one who has possession of the car. You are best advised to retain an attorney to help you sort this out an vindicate your rights.


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