If a bank goes under, can they demand that you pay your car loan off in full immediately?

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If a bank goes under, can they demand that you pay your car loan off in full immediately?

I don’t know if my question falls under this category or not. I just received a letter today stating that I had to pay my car loan off in full, because the bank went under. They said I had to pay it by 11/01, which is today and I just got the letter to today. When I called them, they would not accept my credit card to pay off the loan. They said they do not accept credit cards. Can they really demand that I pay it off in full or take my car? I just sent them a $350 car payment 2 weeks ago.

Asked on November 1, 2010 under General Practice, Georgia

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 10 years ago | Contributor

Something does not sound right; as a general matter, whatever happens to the *lender* does not affect the borrower's obligations. Bought, merged, bankrupt, etc., it should not matter. That said, you do need to check your agreement with them to see if there was any contingency, activated by what has happened (e.g. some change of control) that would accelerate your paying the loan. If you agreed to an acceleration in taking out/signing for the loan, you might be held to that agreement; but otherwise, again, what happens to the bank shouldn't matter. You should also ask whomever is calling to send you a copy of the document, page, term, etc. which requires you to pay early--though have it faxed, and don't open a PDF from them on your computer, since this may be a scam. Have you tried verifying independently what has happened to the bank? Calling the bank yourself, at the contract numbers you have (instead  of relying on your caller) and asking what is going on? Etc.


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