Bank's Mistake

[shammack]

I recieved the legal documentation from my financial institution for my current automobile loan. It consisted of a reciept stamped, dated, and signed that my auto loan was "payed in full" along with the title. The loan was payed off my exhusband as we were preparing a for an uncontested divorce. A year later I recieved a pass due notice and now the bank claims that one of the checks was returned to them for NSFs. They threatend to report me to the credit bureau and stated that my title was null and void as of that day. Can the bank do this and do I hold legal ownership of my automobile? Do I owe them money, legally?

[Loosehead]

Yes, if the cheque bounced there is still outstanding debt. They will pursue it. Assuming a standard Hire purchase/ car loan agreement then you do not own the car until the last payment is made. Just realised you are probably US, I describe the UK position, I don't know what the US rules are.

[Carol Anne]

You sound as if you are posting from the USA, but I would assume that the law is the same as in the UK, in that a bounced cheque is proof of a debt unpaid. You may well be in possession of the title for the car but if somewhere in the original agreement that you signed there is a clause that allows them to do this in such an event, you may very well have to cough up im afraid. As for the actual car itself, since you were in possession of the title, you might well have sold the car before you got wind of any of this. There's not a lot they could have done about that is there. Youv'e got the paper and the car..... possession is 9/10ths of the law.