Expert: Kathleen Eads - 6/15/2006

Question
My son recently surrendered his Jeep to the bank , he was unable to make the payments. The repo company picked it up and delived it to the bank. There it was stolen, and now they are trying to tell him he is liable for the whole bank note. Is this possible? Wouldn't they have ins. for things like this? The paper work at the bank had all been signed & finished on the vehicle.

Answer
Tracy,

What's the old saying..."possession is 9/10ths of the law."?

I would have a problem if the repo company delivered it to the bank, and then it was stolen.  I'm with you...I would think the bank would have insurance for things like this.  

HOWEVER, that being said, your son is still going to have some financial liability.  Surrendered cars are normally sold at auction for a wholesale amount.  That amount is applied to the note, and the customer would still be responsible for any residual amount left on the loan.  I would think the bank would file an insurance claim, apply the proceeds to the note.  Your son would be responsible for anything left after this.  

Keep in mind, I'm not an attorney, and you might want to hire one to represent him on this matter.  It sounds like the bank is double dipping; trying to collect from insurance AND your son.  

Hope he gets it worked out,
Kathleen Crabtree-Eads