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Repo Voids Orig Loan Agreement?

Discussion in 'Credit Talk' started by tonyd, Oct 30, 2003.

  1. Oct 30, 2003 #1
    tonyd

    tonyd Well-Known Member

    Am I right that when a car is repo'd the loan agreement is voided?

    If so, wouldn't that void the loan balance due?

    And since the loan agreement is voided, you are not obligated to pay the loan balance?

    You would only be obligated to pay the deficiency balance if the car sold at an auction?

    Or am I in a dream world???
     
  3. Oct 31, 2003 #2
    Flyingifr

    Flyingifr Well-Known Member

    You are in a dream world. None of that is true,
     
  4. Oct 31, 2003 #3
    gib

    gib Well-Known Member

    Not exactly true Flyingifr.


    Gib
     
  5. Oct 31, 2003 #4
    tonyd

    tonyd Well-Known Member

    Re: Re: Repo Voids Orig Loan Agreement?

    I just found in Ohio, where this reop ocurred, the Ohio Revised Code (same as UCC 9-622), and it states:

    § 1309.622 (UCC 9-622) Effect of acceptance of collateral.

    (A) A secured party's acceptance of collateral in full or partial satisfaction of the obligation it secures:

    (1) Discharges the obligation to the extent consented to by the debtor;
    (2) Transfers to the secured party all of a debtor's rights in the collateral;
    (3) Discharges the security interest or agricultural lien that is the subject of the debtor's consent and any subordinate security interest or other subordinate lien; and
    (4) Terminates any other subordinate interest.
    (B) A subordinate interest is discharged or terminated under division (A) of this section even if the secured party fails to comply with this chapter


    Looks like it is voided; only the deficiency can legally be collected.
     

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