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hannemie123 · Apr 29, 2007, 08:32 PM

Made last payment on car Oct. 2, 2002,car was picked up and sold BELOW fair market value. Now (April 23) was served with court papers re. suit to obtain judgement against me for difference between sale price of car and the loan. Live in Texas. 1. does 4 year statue of limitations apply to this? 2. has car being sold too cheap have any bearing on this.

Northwind_Dagas · Apr 30, 2007, 02:27 PM

I cannot answer for the statue of limitations, but to your second question: I can say that they can sell the car for any value and you will owe the difference.

More info on the Statue of Limitations can be found here:
Statute of limitations on debt collection
Statute of Limitations defense for disputing debts!

A few things that stood out to me was:

Although the statute of limitations has expired (the time allotted to legally enforce the debt in court) collectors can still attempt to collect expired debts (unless they were discharged in bankruptcy) and even take you to court to try and enforce the collection of debts. However, if you meet your state's qualifying criteria and raise the "Expired Statute of Limitations" defense, the case is generally dismissed on the spot.

Warning! As stated earlier, even though the statute of limitations has expired and you are unable to pay the debt, you can still be hauled into court. So, you must appear in court to raise the expired statute of limitations (SoL) defense. If you fail to appear in court, collectors stand an excellent chance of obtaining a default judgment.

However, it's worth mentioning that, in most cases items that are repossessed are often sold at auction for far below what is owed. The result is an unsecured debt that the debtor is still responsible for and expected to pay.