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Auto Loan - Car Returned Bal Due?

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Auto Loan - Car Returned Bal Due?

Postby Montrelle » Fri Feb 06, 2015 9:32 pm

I live in Ohio.  

I started an auto loan with CNAC in 11/2009.  My car was totalled when someone committed a hit and run in June 2010. My insurnace company(Geico) sent CNAC a check for the value of the car which left me a balance due with CNAC of $4,000.00 since I didn't have GAP insurnace(check was sent to finance co in June 2010).  I purchased another car with same finance company(CNAC) 6/14/10 where they rolled over my balance of $4,000 into the new loan. I took the car back the day after I purchased it(6/15/10) and CNAC accepted it back and I signed a form basically saying I was returning the car and wouldn't owe the amount due since I returned it and they would refund me funds that was put towards the down payment.  I am assuming the return only consists of $amount of new car and not the $4,000 they rolled over from my previous loan and it would now be due?

I have tried to contact this company for 60 days now and they will not return my calls or haven't sent any letter informing the balance that I owe($4,000).  

#1:  Do I still owe this past due amount $4,000 from the previous loan?

#2:  What are my next steps if this finance company doesn't contact me regarding this balance and it ends up on my credit report?

Thanks in advance


This really depends on the contract wording.  Specifically, the return paperwork when you brought the car back.  Ideally, the paperwork says what amount is voided/paid in the contract.  We know they likely will be able to prove you owed the original $4,000 and this amount was written into the new purchase, so I think the onus may placed on you to prove it was taken care of when you returned the contract - that is if they pursue it legally.

I can't say if you owe it LEGALLY without seeing the paperwork.

You question regarding what to do if it ends up on your credit report is also premature because it depends on what they are reporting, the steps that led up to it, and if it is accurate or not.  I'm not avoiding your specific question, it's just premature.  Credit repair(a likely option if it does show up) is a reactionary function.  

I will say it is important you have a solid paper trail though.  This includes documented and provable communications.  If you receive any notice from a collection agency or attorney it is CRITICAL you respond via certified mail and keep the paper trail.  Many people's credit troubles are simply not responding or keeping a paper trail.

Good luck, please feel free to post another question as the situation develops.  If it develops I will be able to give more specific directions.


---------- FOLLOW-UP ----------

Thank you for your reply.  Since this finance company won't call me(or mail me anything), should I try to contact them or wait until they contact me?  

(If they wanted their $ bad enough I would assume they would contact me).

Also, I don't have a copy of the paperwork I signed.  When I went back to the finance company to inquire about my funds sent to them from my Ins company they had no idea what was going on so I handed them the copy of the form I signed and I realized they never returned it when I got home.  

Should I call them to ask for a copy of this paper? If so, How should I word the request in case they think it's suspisious?

Thanks again

Thanks again
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Joined: Sun Apr 13, 2014 11:34 am

Auto Loan - Car Returned Bal Due?

Postby Bentlie » Fri Feb 06, 2015 11:33 pm


I think the more important paperwork is the return paperwork.  You gave them a car, what type of credit or voided debt did you get?  That really determines all in this case.  If this contract says you are credited the full amount of the purchase contract, including the $4,000, you are likely legally safe.  If it doesn't say that or is vague, you may be on the hook and it may be wise for you to follow-up.

How is this reporting on your credit reports?  You can get one free copy every year at www.annualcreditreport.com.  You may want to wait a month or so to see the updates or subscribe to a monitoring service that allows you to pull your credit reports more often.

Regarding the original contract, you likely will need that, especially if the return contract is vague on it's wording - meaning the return contract does not give a specific dollar amount but says something like "all debt is settled" or "amount paid in full."  How about getting a copy of the contract from the seller or dealership instead of the finance company?

I think you need this type of information - if at all possible - BEFORE you decide whether or not to contact the finance company about the $4,000. BTW, do not assume the creditor would contact you if they wanted their money bad enough - big mistake!  For all you know they are preparing a lawsuit against you.  This is why you have to get the information on two contract and perhaps your credit reports first.  Consult an attorney to interpret the contracts and the legal status of the debt if you need to, it may be worth it.

Good luck, Regan
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Joined: Sat Jan 04, 2014 4:33 pm

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