A client of mine had a glaring issue on her Credit report, a recent automobile repossession with a balance. Brenda was in the process of trying to obtain a mortgage to purchase a home and this was hindering her from securing the loan.
Well, for years I’ve told my clients they must get into a payment plan for that debt and be able to provide a good letter of explanation to the lender. That’s an easy fix but not always worth it. In the state of Illinois, by the time the creditor re-sells a vehicle, they should have gone through a laundry list of processes including, ensuring the sale of the vehicle was done in a commercially reasonable manner and provide proper notice of the resale after repossession. Over time the amount owed over the re-sale deficiency was so great it was jaw dropping. After the collection agency got involved and tacked on fees, her once $6,000 balance turned into over $13,000. In today’s economy, creditors have become even more desperate to collect as much money as they can but it’s not a hopeless situation.
I prepared Brenda a letter outlining Illinois repossession re-sale law, asking for the proof of documentation, explained that they are in violation of the Fair Credit Reporting Act Law and that she would be forced to report them to the Federal Trade Commission unless they obliged. They responded they had no proof and the original creditor had none either. The account had to be removed from her Credit Report in its entirety; she didn’t have to pay them, and is now ready to pick out her new home. That’s one repossession that possessed very little over this determined homebuyer.
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