What to do regarding loan irregularities?

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What to do regarding loan irregularities?

I co-signed for a car loan for my son. At time of purchase we were told that payments could be made on the down payment and not to tell the loan office. So payments were in fact made towards the down payment (I did not get receipts). Now the dealership is trying to get the entire amount. Car payments are current. Car dealership is now requesting over $1700 for down payment. Can I write a dispute letter? Can I contact loan office?

Asked on April 24, 2011 under General Practice, Nevada

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 10 years ago | Contributor

There are three different issues:

1) Legally, if you were told to pay the downpayment in a certain way, you should be credited for those payments--at least as a general proposition.

2) However, at the same time, if you lied to the loan office, which seems like it may have been the case (e.g. "not tell the loan office") this presents several problems. First, any agreement between you and the dealershhip would not necessarily bind the loan office, since they were not a party to those agreements; also, it may be that you committed fraud vis-a-vis the loan office by how this loan was taken out and the down payment made, which may given them a cause of action against you and/or allow them to rescind the sale. You should still be able to proceed against the dealership or whomever you sent the money to, but not vs. the loan office itself.

3) Factually, if you don't have receipts, then if you don't have any other way of proving payment (e.g., you paid cash), you may not have any recourse--a payment you can't prove may as well as not have been made. (You can try to prove it by testimony, but if the other party disputes it, you're at a disadvantage if you are the one suing, since then the burden of proof would be on you.)

You should consult with an attorney, bringing all documentation and evidence, who can review this situation in detail for you and advise you as to how to proceed; recognize that you are probably not starting off from a good place, however.


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