Sometimes banks make no sense! (repo issue)

[Satori]

So my car got repo'd back in July, I should have had $3k or less to pay on it but thanks to a shady bank I for some reason still had like a $7k+ balance on it and even when we did an audit found I was right that there numbers were totally wrong they came up with some bogus fee's that ate up the $4k. I explained my financial picture and offered to pay off the car if they would accept the $3k or what ever it was I owed (its been months since I looked at numbers, don't remember exact figures) from my POV. They refused, I told them then they will have to take the car because I couldn't afford it (my parents were willing to pay off the balance) and I wasn't going to pay there crazy BS fee's. They ended up repo'ing the car and selling it at auction with a balance due of like $6000.

I just got a call from a collection agency saying the bank was offering to take a pay off of $3k to have the debt marked as paid Same friggin deal I offered them when I had the car and now they want to offer it when I have nothing? They can bite me!

Yes I know I still owe the debt but I am in no position to pay it, not even $10 mo and the lady was incredibly rude and acted like I had just gotten the car with no job or lied about having one to get the car (yes she actually said that!). umm, I bought the car back in 2004 when I had a job and could afford it! 5 years later things are a bit different and thanks to a shady bank I was still paying on the stupid thing. They refinanced it at one point when I was both jobless and homeless to lower the payment and they knew the situation when they did it. My credit is beyond trashed at this point I'm pretty sure, the repo can't hurt me all that much more

Just makes me mad that now they want to offer me the pay off that was the actual payoff and not what they said it was thanks to there BS fee's.

[zebra15]

I had a repo several years ago and honestly 2 years out it didnt make a difference. I stopped taking the collections calls and they stopped a couple months out. Like you, my credit was trash any way.

[bluebunny]

Sounds like a headache. I hope they'll write it off and leave you alone.

[maciascl]

Unless you are getting the car back, which you obviously aren't, I wouldn't pay it either. Having worked for a finance company & done collections, I can say it is just there last effort to try to scare some money out of you. It would help your credit, but not by much because it will still show the repo just with a paid balance. They may threaten to sue you for it, but it is VERY unlikely they would go through the trouble for such a small amount. They will just write it off eventually.

ETA: Keep in mind if the collection agency keeps calling you you have the right to request that they only contact you in writing. Tell them you are familar with the Fiar Debt Collection Practices Act & that if you ask them to stop they have to. If they don't or they start harassing you you can report them to the Federal Trade Commission.

[Satori]

Originally Posted by bluebunny

Sounds like a headache. I hope they'll write it off and leave you alone.

They threatened to give me a 1099 something. That thing that says you got income to the IRS like it was a serious threat.

[angelcollector1]

I've had a repo before, not once but twice. The first one was 23 years ago and they wrote it off, it was in my DH and my name. We eventually filed bankruptcy so the balance went away in bankruptcy.
The 2nd repo in 2004. I had lost my job and had no income and that was the last thing I have been paying, sorry.. but food and housing come first. It was a voluntary repossession, I told them to come take the car, I couldn't afford to pay for it. It looks better on my credit report.. anyway, they sold the car and sent me the bill for the remainder owed. I never paid one cent on it, it shows on my credit report that there's a balance but it has been written off. I think they sent me a couple of collection letters that I ignored and never heard another word.
ETA- as far as a 1099, I think that's like when you do a short sale on a house. I'm sorry, but I don't agree that it's income when you don't pay for something.. and I would question the IRS about it or talk to a tax lawyer. I have never received one. Probably just another way to hopefully threaten you pay some of the $, and once you send them anything towards the debt, then you would probably expect to continue to hear from them and you agree that you owe it.

[velochic]

I think it might be in your best interest to go back and look at your purchase contract for the car. While you might think this bank is shady, they have to 100% operate within the confines of the agreement. I would go through that agreement with a fine-toothed comb and see what "loophole" they have managed to use against you. Most likely, everything they are doing is perfectly legal. It may not be perfectly ethical, but no business arrangement ever is, unfortunately. It's sad but true. Each party is always out to make the deal to their best advantage.

What I'm saying is that they can cause some serious problems, down the line... years from now even. If they get a judgment against you, then they can garnish any money you have coming in (including tax refunds).

Just be careful with this because legally, I think you probably do owe the money. That's how these contracts are written up. You are liable for the difference between what is owed to them and what they were able to get out of the car at auction. You're certainly not the first this has happened to. Good luck!

[velochic]

Originally Posted by Satori

They threatened to give me a 1099 something. That thing that says you got income to the IRS like it was a serious threat.

A 1099 is a form that companies file to state that, through them, by some means (contractual, usually), you have an income of a certain amount from them this past fiscal year. If they issue this tax reporting form to you, you are required to pay income taxes on this amount. You can't just ignore the form. The IRS will come after you for unreported income. Be careful here, because this could land you in a whole 'nother mess... and this time with your state and federal gov't, which could affect any aid you may be getting. I hope you don't just blow this all off. Ignoring it can result in some worse problems down the line. Just be careful. I don't think it's a "threat", just a notice that while they might write it off, you are still liable for the taxes of the write-off. And it *is* serious.

[Satori]

Originally Posted by velochic

A 1099 is a form that companies file to state that, through them, by some means (contractual, usually), you have an income of a certain amount from them this past fiscal year. If they issue this tax reporting form to you, you are required to pay income taxes on this amount. You can't just ignore the form. The IRS will come after you for unreported income. Be careful here, because this could land you in a whole 'nother mess... and this time with your state and federal gov't, which could affect any aid you may be getting. I hope you don't just blow this all off. Ignoring it can result in some worse problems down the line. Just be careful. I don't think it's a "threat", just a notice that while they might write it off, you are still liable for the taxes of the write-off. And it *is* serious.

oh I know, I'm just wondering, I have zero taxable income which means my tax liability is zero, if the 1099 says its income then I'm wondering, does that mean its considered earned income and I can use it to get a tax refund? I doubt it, just trying to look at it positively.

[MissinNYC]

Originally Posted by Satori

They threatened to give me a 1099 something. That thing that says you got income to the IRS like it was a serious threat.

They can actually do that if they forgave debt. They count the forgiveness as income and charge taxes on it.

Sorry about this, it sounds really hard. I hope it works out ok.

[TiredX2]

Originally Posted by Satori

They threatened to give me a 1099 something. That thing that says you got income to the IRS like it was a serious threat.

I have to agree I can't imagine them thinking this would convince you to part with any money. Sure, it would be reported as income, but what do they think your income is that paying tax on a $6K write off would somehow be MORE than the $3K they are asking for?

[RooRooDog]

Former IRS employee here... I only worked in customer service, I swear!

The form 1099C is issued by banks for canceled debt over $600. Federally, you are taxed in it at the highest tax bracket for your income- I don't know about state tax rates. The 1099C cannot be counted as income for EIC purposes. If you do receive this form, you need to include it on your tax return, or the IRS will come after you, no joke. It usually takes a year or two... but if you get audited, you will have to pay penalties and interest.

I'm editing this to say that a 1099C does NOT necessarily require you to file a return, sorry.

Hope that helps, best of luck!