Allegan, MI asked in Collections and Small Claims for Michigan

Q: On April 2, 2012, when I was on disability, I had a auto loan & returned a vehicle, 'cause I couldn't afford it no more.

On April 27, 2012, they sold the vehicle. About 1 year later on my credit report it showed that the company had put it as a charge off and it was at a zero balance. On April 27, 2019, it dropped off my credit report and it was not longer listed. Now, today, December 9, 2019, I received a summons from the courts from them saying that I am now being sued for the remaining balance. Can they do this, is this legal?

Related Topics:
2 Lawyer Answers
Trent Harris
Trent Harris
Answered
  • Collections Lawyer
  • Jackson, MI
  • Licensed in Michigan

A: It could be legal, but maybe not because it sounds like the debt may be past the statute of limitations. The statute of limitations in Michigan for a suit to collect a debt based on a written contract is 6 years. The limitations period begins to run when the debt goes into default, not later when the car is repossessed.

I'd recommend you get a consult with a debt collection defense or bankruptcy attorney in your area to review all of the relevant facts and go over your options. You may have a defense to the suit. Feel free to contact me online if you would like to discuss.

Adam Alexander
Adam Alexander
Answered
  • Consumer Law Lawyer
  • Southfield, MI
  • Licensed in Michigan

A: Charging off an account does not prevent the creditor from collecting it. A charge off is simply the process of writing off a bad debt for tax purposes during the relevant fiscal period.

Justia Ask a Lawyer is a forum for consumers to get answers to basic legal questions. Any information sent through Justia Ask a Lawyer is not secure and is done so on a non-confidential basis only.

The use of this website to ask questions or receive answers does not create an attorney–client relationship between you and Justia, or between you and any attorney who receives your information or responds to your questions, nor is it intended to create such a relationship. Additionally, no responses on this forum constitute legal advice, which must be tailored to the specific circumstances of each case. You should not act upon information provided in Justia Ask a Lawyer without seeking professional counsel from an attorney admitted or authorized to practice in your jurisdiction. Justia assumes no responsibility to any person who relies on information contained on or received through this site and disclaims all liability in respect to such information.

Justia cannot guarantee that the information on this website (including any legal information provided by an attorney through this service) is accurate, complete, or up-to-date. While we intend to make every attempt to keep the information on this site current, the owners of and contributors to this site make no claims, promises or guarantees about the accuracy, completeness or adequacy of the information contained in or linked to from this site.