Expert: Michael Brotherton - 1/31/2008

Question
When my ex and I got divorced, I was awarded my vehicle and I continued making payments on it. The loan was in both our names. However, he moved out of the country and stopped making child support payments. At this point, I had to either give up my house (it was also in both our names) or let the bank reposess my vehicle.
I took the car back to the financial institution knowing my credit would be ruined.It has been 3 years since I took the car back, and they sold it for 3 K. The outstanding balance of 5500 was never paid. I currently don't have a car payment, nor credit car debt. I recently got a letter from security service federal credit U, offering a 50% off settlement. I don't have that kind of money. The letter states that if I don't accept the offer, they would pursue further action.
Can they garnish my wages?
Can they put a lien against my property?
Would the court grant them judgement?
Would I be responsible for attorney fees?

what should I do?
I work full time and support my 3 kids on my own, the only thing I have is my house and a vehicle I paid for cash.  

Answer
1. In TX you cannot be garnisheed
2. They may obtain a judgment for the deficiency
3. They may be able to put a lien against the property but will not pursue foreclosure
4. You may be responsible for legal fees.

All that said, they are limited as to what they can do even after a judgment. A lien just ensures they get paid if you sell your home or refinance. If this happens you can renegotiate a settlement prior to closing on a loan or sale. You may be able to get a better deal on a settlement than 50%. They may attempt to attach bank accounts so keep balances low in your accounts if they get close to getting a judgment.

All in all you are relatively safe. If you need help negotiating give me a call at 877 270 8204 and I will be happy to help. Until them, relax.