Dear To Her Credit,I had my car repossessed five years ago. Now they are garnishing my wages for $30,000 -- twice the amount I owed them before. Also, I owned the car jointly with my husband, who is now my ex-husband, and they are not bothering him. What can I do? -- Maria
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Dear Maria, You can find a lawyer -- immediately.
I don't recommend running to a lawyer for every problem that you can at least try to solve yourself. However, $30,000 is a huge sum of money for most of us. If it's taken from your paycheck bit by bit, it can cripple your finances for years to come. You need qualified legal advice, and you needed it yesterday!
R. Glen Ayers, ex-bankruptcy judge and lawyer, had a few questions about your case.
- "The first place to look is the divorce decree," says Ayers. You need to find out who was responsible for the debt. The divorce decree doesn't change your contractual relationship with the lender, because the lender is not a party to the divorce. However, finding out who was supposed to pay the debt is a start. If your ex was supposed to pay part or all of the debt, you can pursue him for it. Ayers says, "She should consider claims against him, but only with the advice of counsel -- he may/could be liable for 50 percent or more or less, depending on facts and state law."
- You owned the car jointly with your ex. Did both of you actually sign the note?
- Did you live in a community property state? If so, he may be liable without execution of the note.
Of course, if your ex has filed for bankruptcy, and listed the debt and discharged it, you may be out of luck in getting money from him.
I'm surprised that your deficiency is $30,000. Ayers agrees that is a large deficiency for a repossession. Even the $15,000 original amount is high. Usually, lenders of car loans don't lend more than the initial value of the car loan. During the early years when the car is depreciating rapidly and the payments are largely going toward interest, it's easy to get upside-down on your loan (where you owe more than the car is worth). However, unless the car was wrecked or lost value rapidly for some other reason, it's difficult to see how you ended up owing so much!
If your lawyer doesn't see a way to get money from your ex, you may have to consider bankruptcy. Bankruptcy is not to be taken lightly. It's not easy, and it's certainly not the way to "just give up" that some people think it is. If you have no significant financial assets, and you owe more than you make or can reasonably expect to make in a year, bankruptcy may be worth it. A lawyer or other qualified counselor who looks at your entire financial picture can help you decide what to do.