FMC Repo, Settlement, and 'paid Charge-off' advice...URGENT!

[Khizersoza]

My car was repo'd in September '03 and was sold for $8750 in February '04. The original loan amount was $38,000. Last week, I was sent a 60% settlement offer for $5200. I spoke with Ford, and they are willing to give me payment arrangements on the settlemant offer ($1000 now, and $851/month for the next 6 months) to pay off the amount. After the amount is paid off (around september '04), they will remove the repo from the CRA's and report as "paid charge-off, $0 balance". Outside of the repo, I have no other negative items on my credit reports, everything is in good standing, and everything has been paid on time the last 2 years. My car was repo'd and I was late a ton because my mother was terminally ill for 3 years, and the vast majority of my salary went to her medical expenses and nursing home costs. I'm trying to purchase a home, and get another vehicle in '05, hence the urgency to pay off the amount.

 

That said, I have a few questions from the board experts.

 

1. Will a "paid chargeoff account be reported to the CRA's positively or will it be derrogatory?

 

2. If reported derrogatory, how much will a "paid chargeoff, $0 balance" hurt my scores? Will this affect me from getting a mortgage or a new vehicle if everything else on my report is in good standing?

 

3. Once I'm making payments (after the 3rd payment or so) on the Charged off amount, can I successfully dispute the account as "paid as agreed".

 

4. Once I pay off the entire charged-off amount, can I successfully dispute as 'paid as agreed never late' to have lates payments removed. I was late a ton during the 3 1/2 years of having the vehicle.

 

5. Is there a way to negotiate with Ford Motor Credit to have them re-open the account as revolving(paying as agreed) while making the settlement payments?

 

6. Will it help to send a letter to the CRA's letting them know that the financial burden from mothers terminal illness rested upon my shoulders hence the late payments and charged off account? Will creditors take that explanation into account when reviewing my credit history?

 

7. Assuming I'm not able to get my account to report as "paid as agreed" after settling the debt, will it be in my favor to let creditors know up front before applying for credit (mortgage & vehicle loan) why the chargeoff occured (mothers terminal illness)?

 

 

Guys I know these are a lot of questions, but this is urgent...I've been reading the board for a little over a month, however I have yet to see a situation like mine. Since my repo is kind of new, I need a lot of guidance. Please help, I don't know where else to turn

[dixiedrifter]

1. How much was owed on the vehicle at the time of sale?

 

2. How much was the vehicle worth?

 

3. Did ford follow all provisions according to UCC with the repo?

[JoeDirtPharmD]

1. Will a "paid chargeoff account be reported to the CRA's positively or will it be derrogatory? Derog

 

2. If reported derrogatory, how much will a "paid chargeoff, $0 balance" hurt my scores? Will this affect me from getting a mortgage or a new vehicle if everything else on my report is in good standing? Unknown how bad it hits the scores, but the insinuation is that you ONCE had a Chargeoff, that's no fun when lenders review your reports.

 

3. Once I'm making payments (after the 3rd payment or so) on the Charged off amount, can I successfully dispute the account as "paid as agreed". You can dispute anytime you want. God Bless America. No guarantees it'll work tho.

 

4. Once I pay off the entire charged-off amount, can I successfully dispute as 'paid as agreed never late' to have lates payments removed. I was late a ton during the 3 1/2 years of having the vehicle. See above answer

 

5. Is there a way to negotiate with Ford Motor Credit to have them re-open the account as revolving(paying as agreed) while making the settlement payments? Never did biz with them. It's unlikely they will, tho.

 

6. Will it help to send a letter to the CRA's letting them know that the financial burden from mothers terminal illness rested upon my shoulders hence the late payments and charged off account? Will creditors take that explanation into account when reviewing my credit history? CRA's don't care. Might forward your letter onto FMC and see if someone there might have empathy for your concerns. Potential lenders might care, but it'll need to be one hell of an explanation.

 

7. Assuming I'm not able to get my account to report as "paid as agreed" after settling the debt, will it be in my favor to let creditors know up front before applying for credit (mortgage & vehicle loan) why the chargeoff occured (mothers terminal illness)? Maybe - of course you can't very well explain that to an automated, online approval process.

 

Also - like Dixie said, look into whether the repo was a legitimate process, you might be able to find resolve by those means....

[dixiedrifter]

I'm kinda trying to form the opinion that the repo was not done in a commercially reasonable due to the low price that the vehicle was sold.

[Khizersoza]

1. How much was owed on the vehicle at the time of sale?

 

2. How much was the vehicle worth?  

 

3. Did ford follow all provisions according to UCC with the repo?

 

 

1. I owed 17,200

 

2. The vehicle was worth $14,000

 

3. Yes they followed all provisions

 

 

One other question:

 

Has anyone successfully negotiated with Ford Motor Credit to get a deletion on their credit reports in exhange for a payment on a settlement.

 

From the answers I've received thus far, it seems as if paying the settlement amount to have it listed as "paid charge-off, $0 balance" with the CRA's will not help me much at all. Is this the correct assumption?

[Khizersoza]

I'm kinda trying to form the opinion that the repo was not done in a commercially reasonable due to the low price that the vehicle was sold.

 

The car was sold so low because there was physical damage done to the car. There were more than a few dents and dings on the car which brought the value down. Also the Convertible top had a huge tear in it. Because of my mothers high medical expenses and nursing home costs, I had to take insurance off the vehicle. I wasn't able to afford to have the repairs done after a few being the victim of a couple of minot hit and runs while my car was parked.

[dixiedrifter]

Some might be less than unanimous on my opinion, but I would seriously consider taking them up on their offer.

 

A repo looks very bad on tradeline, so does a charge off, but IMO a repo carries more weight on an installment loan.

 

You might try to add a nondisclosure clause in with the agreement to prevent them from verifying any future credit bureau disputes.

[FlaDave]

What are you trying to do?

 

If your goal is to pay your Debt then pay it. Work out the

best settlement you can.

 

I don't believe paying this and having your file marked as

"paid chargeoff, $0 balance" will help your scores at all but

if you are looking at a mortgage or such they may require

you to pay it anyway.

 

Once it is paid, you have a better chance of disputing as

not mine as Ford may then not reply to dispute as they

get nothing for doing so.

 

So the answer is: It most likely will not help your scores

but it will be one less call from a collector.

 

Just my (2) cents.. Next week I hope to get a raise..

[dixiedrifter]

My concern is that they are knocking off about $4,000 off the debt. If the OP was to get sued, once fees are added it could be up near $5,000 and there would be no defense.

 

IMO, its just not worth it not to settle. BTW you want them to give you a release on all claims so they cannot sell the remaining balance to a collection agency.

[Khizersoza]

Some might be less than unanimous on my opinion, but I would seriously consider taking them up on their offer.

 

A repo looks very bad on tradeline, so does a charge off, but IMO a repo carries more weight on an installment loan.

 

You might try to add a nondisclosure clause in with the agreement to prevent them from verifying any future credit bureau disputes.

 

 

This may be a dumb question, but how would I go about getting them to add a nondisclosure clause with the agreement to prevent them from verifying any future credit bureau disputes? Has anyone ever pulled that off? If this is the case, I'll pay it off, the dispute it as paid as agreed after I pay the amount.

 

Also, what verbiage should I use to ask for a release on all claims so they cannot sell the remaining balance to a collection agency?

 

I'm leaning towards paying off the repo (unless someone has any other advice they can give me), however I'm trying to get as much advice as humanly possible before agreeing to the settlement and shelling out that kind of cash.

[Khizersoza]

Does anyone have anymore advice? Whychat specifically? Should I pay off the settlement and dispute as paid as agreed at a later date? Is there a letter I can write to try and dispute the validity of the Repo? When my car was repo'd my plates were not left with me. DC repo law states that plates must remain with the debtor. Can I use that as an angle to have the account deleted from my credit reports or to forge an legit argument with FMC?

 

I willing to listen to any and all advice out there. I'm desperate.

[Why Chat]

In many States if you have paid more than 60% of the purchase price, a deficiency is not allowed.

 

You said the original loan was $38,000, and that your balance was $17,000? Was that the BALANCE or the PAYOFF?

 

If it was NOT the payoff, then you may not actually be liable for anything.

 

You say everyhing was done correctly? So you received notice of the sale, a notice of your right to redeem, a complete accounting of the sale, including where and when it was held and how much the car was sold for, the expenses of the sale, AND YOUR PAYOFF FIGURE?Plus an acounting of, and request for, the deficiency?

 

In my OPINION,based on the information you posted, I believe that FMCC is trying to pull a fast one on you.

[Khizersoza]

In many States if you have paid more than 60% of the purchase price, a deficiency is not allowed.

 

You said the original loan was $38,000, and that your balance was $17,000? Was that the BALANCE or the PAYOFF?

 

If it was NOT the payoff, then you may not actually be liable for anything.

 

You say everyhing was done correctly? So you received notice of the sale, a notice of your right to redeem, a complete accounting of the sale, including where and when it was held and how much the car was sold for, the expenses of the sale, AND YOUR PAYOFF FIGURE?Plus an acounting of, and request for, the deficiency?

 

In my OPINION,based on the information you posted, I believe that FMCC is trying to pull a fast one on you.

 

Whychat: The $17,000 was the balance. I had already paid $21,000 into the vehicle over a 3 year period, and I owed $17,000. Doing the math, I have definitely paid more than 60% of the purchase price. I live in Washington, DC, however I purchased the car from a dealership in VA. That said, everything was done correctly. They sent all literature including sale, when and where it was held, expenses of the sale, ect.

 

1. How and where would I find out the the "60% law" applies to Virginia and Washington, DC?

 

2. Assuming the laws are in my favor, how should I proceed With Ford Motor Credit? Where would I begin, and what should be my course of action? I do not want to pay anything (settlement amount--$5K) I there is a legal way out of this.

 

As I said, I am extremely desperate. PLEASE HELP.

[pryan67]

Whychat: The $17,000 was the balance. I had already paid $21,000 into the vehicle over a 3 year period, and I owed $17,000. Doing the math, I have definitely paid more than 60% of the purchase price. I live in Washington, DC, however I purchased the car from a dealership in VA. That said, everything was done correctly. They sent all literature including sale, when and where it was held, expenses of the sale, ect.

 

but how much of the 21000 you paid was interest?

[Khizersoza]

Whychat: The $17,000 was the balance. I had already paid $21,000 into the vehicle over a 3 year period, and I owed $17,000. Doing the math, I have definitely paid more than 60% of the purchase price. I live in Washington, DC, however I purchased the car from a dealership in VA. That said, everything was done correctly. They sent all literature including sale, when and where it was held, expenses of the sale, ect.

 

but how much of the 21000 you paid was interest?

 

 

Pyran67: A lot of that amount was interest. I signed a bad deal when purchasing the vehicle and the interest was 22.5%. Do the 60% rules change when including interests? I was late a ton as well, and there were a ton of late fee's added as well, however as I said, my best guestimate says about 10K (give or take a grand) was interest. Do I still have a case, or am I at the mercy of FMCC and have no choice but to take the settlement offer?

[Khizersoza]

Whychat: Looking at my situation (high interest rate), would I fall under the 60% rule for the District of Columbia (purchased the car from the state of VA)? If so, how should I proceed with Ford Credit? Do you or anyone else have a letter or template anywhere for me to follow? I hate to pester you guys, but as I said, Im desperate.

[four20nik]

All I can say, is that, with the exception of one of our valued members, FMC has screwed many many people. AND...it does surprise me that they followed ALL the laws.

 

If you look at your state's UCC code....or, if there isnt one adapted, look at the federal code...under article 9.

 

You'll find all the laws pertaining to secured transactions, such as vehicles, within the code. Links are in the consumer protection forum...check your state(s) as well as the UCC Locator thread.

[melodist]

Ok, few things...

 

Having dealt with FMC...

 

1. It wont be a paid charge off... it will be a paid repo

 

2. The paid repo will tank your scores for about 2 years, then its not so bad.

 

3. FMC ALWAYS verifys with the CRA's. (I have tried and tried and tried some more.) Though on other account I had 1 old 30 day late, I did get removed. Even today, the repo is NOT reported correctly.

 

Though the damage to your FICO is not so terrible (after 2 years) the diff in my auto enhanced score was 100 points lower.

 

I really dislike FMC. I hope someone beats me before letting me ever get one of their products. (loan or vehichle)

[jen]

In many States if you have paid more than 60% of the purchase price, a deficiency is not allowed.

 

You said the original loan was $38,000, and that your balance was $17,000? Was that the BALANCE or the PAYOFF?

 

If it was NOT the payoff, then you may not actually be liable for anything.

 

You say everyhing was done correctly? So you received notice of the sale, a notice of your right to redeem, a complete accounting of the sale, including where and when it was held and how much the car was sold for, the expenses of the sale, AND YOUR PAYOFF FIGURE?Plus an acounting of, and request for, the deficiency?

 

In my OPINION,based on the information you posted, I believe that FMCC is trying to pull a fast one on you.

 

 

 

 

 

OMG-I'm sorry if I'm jacking your post-this post got me a little excited-Whychat, is there a link or is there information on how to go about getting a repo removed if they did not follow the law? I had a repo in 99 to kirtland Fed. Credit union. We turned in the car, moved overseas and got a call from the finanace rep telling us we owed 5,000 after auction. We paid it. we got nothing in the mail, no notice of auction, nothing. I didn't even know they had to do this. There was no paper work sent!

Thank you for the info and I'm so sorry to the OP for jacking this thread!

[Why Chat]

OK- let me try to sort this out,it is NOT simple, but it isn't rocket science either.

 

First: Here is the link to my repo letter- including resource material.

 

http://whychat.5u.com/repoltr.html

 

One of the links- to State repo data is broken, here is a temporary link until I can locate a better one.

 

http://www.repobounty.com/stateinfo.htm

 

The UCC rules of the State you were a RESIDENT of when the car was repo'd is what counts, not where it was purchased, UNLESS you were a resident at the time in the State where it was purchased,and it has stricter laws regarding the actual installment sales contract.

 

Your notice of the resale should have given you the date and location of the resale and the PAYOFF figure, not the balance.

 

You need to get your original contract, and see how much the car COST- the actual purchase price, excuding interest, taxes, licenses and fees. Then you need to deduct from THAT figure the PAYOFF amount.

If it is more than 60% you likely do not have ANY legal deficiency.

 

PLUS, if your notice of the sale does NOT show the payoff figure, does NOT show the date and place of the resale and does NOT give you a complete accounting of the deficiency, then you DO NOT OWE IT.

 

If your car was sold and repossessed in Va. I believe I have the Va. RISA (retail installment sales act) on the Va. page of my website.

[Khizersoza]

Whychat: FMC never sent a notice or anything of the sort giving me the right to cure the account after the repo; this I know for a fact. It took them approximately 5 months to auction the vehicle because there was an issue getting the repo title, and I was limbo for 5 months waiting on them to get the neccessary paperwork. There was a big issue with them getting the neccessary info. I know because I called them trying to find out what the hold-up was on 3 or 4 occasions. That said, they did send me all the info once the sale took place in February '04. Because the never sent me any paperwork offering me the right to cure the account shortly after the repo, do you think I have a case? Also, on your site it states that one should not send that letter if the repo occured less than 2 years ago. My repo happened about 7 months ago, however I think they made a mistake by not sending me a notice to cure the account. Should I send the letter even though its within the 2 year window? Thoughts?

 

Also, the account is being reported incorrectly with the CRA's. It says the last activity on the account was 6/02, however in actualty the last activity on the account was 6/03. Im taking shots in the dark right now, but Im trying to find any and every angle, and I'm trying to find any crack/mistake within the system that will help my cause.

 

From everything I'm reading FMC seems like one tough cookie, however assuming I end up having to pay the settlement, what would be the wisest negotiating tactics I should employ? Anyone with experience with FMC, please chime in.

[Why Chat]

Here is the Va. code:

http://leg1.state.va.us/cgi-bin/legp504.ex...006000000000000

 

.620 covers the 60% rule.

 

Use the repo deficiency letter NOW -reference the code sections that apply to what they FAILED TO DO, or reference the entire code. section

 

YOU OWE ZILCH

[Brenda0600]

My recent experience with FMC is this. I had three cars within the last 6 years with various lates payment (30 day lates only) on all reports. I have disputed (never late) each and every account/report and most of them are now cleared. The remaining report TU, I am in the processing of redisputing on now on 2 time. I will continue to keep this up until they are removed.

 

I know this only applies to lates; however, they seemed to not answer (causing two of the accounts to fall off on the Exquifax report) or list as Never late. Thus, I am starting to begin to "like them" a little better these dates.

 

I, too, am in the processing of cleaning things up for my next house journey for the end of the year or next and this worked out fine for me. My two (2) cents are definitely continue to dispute 2-3 months after paid off and see what happens. At that point, you definitely have nothing else to lose and potentially a higher score to gain.

[Khizersoza]

Here is the Va. code:

http://leg1.state.va.us/cgi-bin/legp504.ex...006000000000000

 

.620 covers the 60% rule.

 

Use the repo deficiency letter NOW -reference the code sections that apply to what they FAILED TO DO, or reference the entire code. section

 

YOU OWE ZILCH

 

WhyChat: Remember, I live in the District of Columbia not Virginia. I only purchased the vehicle from Virginia. Should I reference this VA code (.620)because this is where I purchased the vehicle or is there a similar DC code I could reference because I actually live in DC. I live in DC, and the vehicle was repo'd in DC so I would think my 'trump card' would be under the DC laws, no?. If you're telling me I have a legit shot at beating this, I will be up all night if I have to writing the letter. I'm fully prepared, willing, and able to write them letters every day for the next year if I have to. I'll do whatever it takes to beat this. I have too many plans, and there is to much I want to do financially to let this one thing handicap me for the next few years. I've endured entirely too much, and I've come to far. I have to get this either removed totally (the goal)or have it reported positively (assuming I pay the debt/settlement).

 

Also, do I send the Repo deficiency letter to FMC, to the CRA's, or both? Again, I'm sorry for pestering you, but you guys have been a God send. I stumbled onto this site by mistake earlier this month while looking for repo help, and I feel as If I've stumbled upon a gold mine; there is a wealth of info here.

[Why Chat]

The repo letter goes to the OC (FMCC) the dealer who sold you the car, and to a CA if it has been assigned to one.

 

I don't even have DC on my website, I will try to see if they have their code? statutes? on the internet.

 

The UCC statutes are fairly uniform throughout, so DC's will be about the same as Va.