Is it legal for auto loan companies to refuse any payment amount you are willing to give them?

Asked 10 months ago - Teterboro, NJ

I called them this weekend updating them on my financial hardship and new mommy-hood (single mother of 8 month old) and also to let them know of the checks I have auto arranged through my bank to being sent to them over the course of two weeks. I missed two payments. They refused any payments from me and wanted the full past due amount. They wouldn't even take anything I had during that call. Can they refuse payments? My car is in repo mode now and I will be paying the full past due this week. I let the auto loan company know this as well. Is it legal to refuse payments?

Attorney answers (4)

  1. Steven Todd Keppler

    Contributor Level 14

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    Answered . Your contract with the finance company will control, but generally speaking they can probably refuse under-payments where you've already missed payments and have identified you're having financial trouble. It is arguably a commercially reasonable practice to demand assurances from a borrower she can keep current on a large loan (such as car loan.)

    As to whether refusing your money is a good-faith business practice, that's another story.

    The foregoing is not legal advice, and nothing in the foregoing shall be deemed to create an attorney client... more
  2. Robert S Snellings

    Contributor Level 6

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    Answered . Acceptance of payments after breach may be construed as a waiver of the prior breach and prevent them from proceeding with the repossession. Of course, as other attorneys have stressed, the loan documents control and should be reviewed by an attorney to determine your rights in this case.

    THIS POST IS NOT INTENDED TO CREATE AN ATTORNEY-CLIENT RELATIONSHIP BETWEEN YOU AND SNELLINGS LAW LLC. Please... more
  3. Robert John Murillo

    Contributor Level 20

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    Answered . Their rights are in your loan documents. You can pretty much guarantee those terms provide that they can refuse partial payments and demand payment as they want. You need to get a written agreement resolving the amounts due, or they will shortly take your car and the lender or a collection agency will then sue you for any deficit.

    This answer is for informational purposes only and is not legal advice regarding your question and does not... more
  4. Shawn B Alexander

    Pro

    Contributor Level 20

    3

    Lawyers agree

    Answered . I agree with the previous answer and once you are in default, ( missed a payment date) they do not have to work with you according to most loan documents.
    Good Luck

    Please be sure to indicate the best answer. If this answer was helpful, please mark as helpful below. Only. If... more

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