Can I sue a third party for notmaking a loan payment on my behalf?

UPDATED: Jun 7, 2011

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Can I sue a third party for notmaking a loan payment on my behalf?

I set up an allotment for my car payment. I financed my car through a finance company and they referred me to a third party company. An allotment was set up for $450 but they only paid out $325 saying the other $125 was paid to another creditor. Can I sue the allotment company for paying money to someone else that wasn’t agreed on. Now I’m getting harassing calls from the finance company saying that I need to pay the rest. I only set up with this allotment company to pay my car loan. I’ve been told its going to go on my credit report and there is the possibility that my car will be repossessed.

Asked on June 7, 2011 under Bankruptcy Law, Texas


SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 11 years ago | Contributor

If the third-party company has either--

1) Violated the terms of an agreement between you and it, as to how the money would be disbursed and what they would do with your money; and/or

2) Committed fraud, by getting you to sign on with them by misrepresenting (lying) what they would do

--then you may sue them for the money they took and possibly for other costs or damages you've suffered as a result of their behavior. This is something you should discuss with an attorney, someone who can evaluate all the circumstances in detail and advise you as to rights, remedies, etc.

You also should probably stop giving any money to this company, though let your attorney review your agreement with them prior to taking any concrete steps.

However, all that will take time; and in the meantime, since you are the one responsible or liable for the car loan, if the loan is not paid, you may lose your car, suffer bad credit history, and/or be sued by the auto financing company. While pursuing your remedies agains the third party, you should also make sure you pay your car loan.

IMPORTANT NOTICE: The Answer(s) provided above are for general information only. The attorney providing the answer was not serving as the attorney for the person submitting the question or in any attorney-client relationship with such person. Laws may vary from state to state, and sometimes change. Tiny variations in the facts, or a fact not set forth in a question, often can change a legal outcome or an attorney's conclusion. Although has verified the attorney was admitted to practice law in at least one jurisdiction, he or she may not be authorized to practice law in the jurisdiction referred to in the question, nor is he or she necessarily experienced in the area of the law involved. Unlike the information in the Answer(s) above, upon which you should NOT rely, for personal advice you can rely upon we suggest you retain an attorney to represent you.

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