CHARLOTTE — A south Charlotte man used his car as collateral on a personal loan. Years ago, he fell behind on loan payments but no one contacted him about it, so he thought everything was OK. But a few days ago, his car was taken without any notice.
“John” was embarrassed about what happened and asked Channel 9 not to use his real name, but he still wanted others to learn from his scare.
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John says after paying off his 2007 Toyota Camry, he eventually took out a personal loan and used the car as collateral.
“My son, he was born premature, so he was in the hospital for three months, so I fell a little behind (on payments),” he explained.
John says some time passed and the lender on that personal loan did not contact him about it.
“I thought I was in the clear,” he said.
That was until one morning recently. “One night I went to sleep, I wake up and it was gone,” he said.
He thought someone had stolen it, but eventually, a collection agency called to say it had taken his car.
John says it was bad enough losing his car, but what made it worse was that his apartment key and work ID were inside it.
Action 9′s Jason Stoogenke emailed the company for him.
It would not talk about this case, citing privacy reasons. But John says the debt collector contacted him less than 24 hours later.
“I don’t know when you did it, but it was really quick, and they said, ‘Hey, we’re returning your car and releasing your title,’” he told Stoogenke.
Here’s what you should know in both Carolinas:
- The statute of limitations for most consumer debt such as credit cards and personal loans is three years.
- Three years is subject to interpretation, but the rule of thumb is the clock starts ticking on the date of your last activity (so usually your last payment).
- Collection agencies can still try to collect after three years, but if they sue you, it’s too late.
- That said, in a case like this, which involved collateral, they may still be able to take the collateral without going to court. So read your contract carefully.
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This wasn’t technically a car repossession case because it wasn’t an auto loan, but here are your rights in those situations as well:
- If you miss a payment or default on your contract in any way, the lender has the right to repossess your car.
- The lender does not have to give you any notice before repossessing your car.
- It’s even allowed on your property to seize the vehicle.
- If you have personal belongings in the car, it can be hard to get them back after the car has been repossessed.
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