Not Sure What to do?

[Anonymous]

So I've been reading these threads here about a month or so and you guys have been extremely helpful. I have actually been paying off past debts from a year ago or so. I'm trying to get my credit score up to par. Right now as it is I stand at 610 Experian 591 Transunion and 587 Equifax. I am trying to get my score up to 750 or higher so I can buy a house.

Here's my problem, I purchased a motorcycle about 2 years ago and then I ended up selling to my friend, which in turn he got the motorcycle impounded because his license was suspended. So I ended up not picking up the motorcycle from the impound which would have cost $2,625.00 to get out which went against my credit and brought it down significantly. Not to mention the loan for the motorcycle was still under my name and affected my credit as well since it is delinquent now. The motorcycle loan was through HSBC and the amount was $7,950.00.

The HSBC loan was rediculous, everytime I tried to make a payment and did the loan amount seemed to go up. It seemed to never go down with each payment.

Is there anyway to get out of this predicament? Since I did sell it to my friend is there a way to write a letter telling HSBC that the motorcycle was sold. How do I deal with the people that impounded the bike?

This is what my debt looks like:

Rickenbacker: $2,625.00

HSBC: $7,950.00

That's a lot of money that I do not have to spend and I should have been smarter not to spend that kind of money. Anyway if you guys have any advice that would be great.

Thanks in advance!

So just my luck, I was going through my paperwork and I found a bill of sale which my friend had signed. Will this do me any good? This is how the bill of sale reads:

I (my name) am selling this 2001 Suzuki GSXR 600cc to (his name) for what is owed on the loan amount of $6,700.00 (at the time). The motorcycle will stay in my name until it is paid in full. I will receive payment from (his name) every 1st and 15th of the month until the motorcycle is paid for. After the motorcycle is paid for he will receive the pink slip from me. Until then he is allowed to ride the motorcycle at his own risk, if he gets the motorcycle towed or crashes it, he is responsible for paying any fines, fees or repairs that need to be taken care of.

So I had him sign it with his drivers license information and everything needed to cover my tracks.

Do you think this would help me in anyway?

Message Edited by BrokeJimbo on 08-19-2009 01:05 AM

[Anonymous]

No suggestions I take it? Or is it to obvious on what I should do?

[jatneal]

I'm new to this, but I will try and offer my .02.  Did your friend actually pay off the loan?  You stated that the motorcycle would remain in your name until it was paid off.  So I'm guessing no or you wouldn't be having this issue.  Please correct me if I'm wrong.  It seems like you may be stuck since it was still in your name as far as the actual loan goes. You may be able to sue your friend in small claims court for the amount of the impound provided you take the contract with you, and the proof that he was the one who held responsibility.  Now you say your friend didn't have a liscense? This may be a whole other horse of a different color(whatever that means) because the judge may question why you wouldnt ask for proof of liscense.  Again I'm just taking a stab at it....I'm pretty sure one of the gurus will be along to help you. 

Good luck to you Jimbo.

[Anonymous]

Hey thanks for your input. I'm thinking I might have to take this one head on and just pay it. Which I think is bull. My so called friend did not pay off the loan. He said that he has his M1 license at the time. However I think he lied to me because I didn't know that it was suspended at the time. Small claims court sounds like a good idea but I know the guy doesn't have a job and he lives out of a truck. So I maybe screwed either way. At the time he did have a job. Anyway I guess I'll have to figure this out on my own. Thanks for your advice.

[jatneal]

I'm sorry for your misfortunes.  They say that friends and family are the ones that stick it to you the most.  Even though your friend doesn't have a job you still have a binding contract so you will be able to seek a judgement against him.  I know we dont want to drag our "friends" to court, but he didnt mind ruining your good name either.  Once he finds employment he will have to pay you back based on the judgement. 

[Anonymous]

Yeah it seems like it may come to this. I appreciate the friendly advice. I really don't want to take him to court but if this clears my credit then I'm going to have too. I bet you if this gets cleared, my credit score will go up dramatically.

[guiness56]

Let me make sure I have this correct.  You sold a motorcycle you are still financially obligated for,  to a friend?  Then he got pulled over, had no license and the motorcycle was impounded?

The bill of sale, I am sure in any state, will not hold up in court.  You took out the loan with HSBC and really should not have been selling the bike unless you got enough to pay off the loan.  Doing so would have left you free to release the title to him along with the bill of sale.   You were financially responsible for the loan and your friend does not have a contract with HSBC, you do.   Unfortunately, when the bike was impounded it shows registered in your name becaue your friend legally does not own the bike, you do.

As far as the impound, by law, they can only release the bike to the registered owner, who is still you.

HSBC does not have to honor the bill of sale. 

I do not mean to sound harsh, these are just the facts.

If you want to know where you really stand, get a free consult with an attoney.

[Jazzzy]

Hi,

I have to agree that this is still your responsibility.

You still owe the amount due on the motorcycle, and you owe the amount due for the impound.

You can sue your friend, but, right now, it looks as if there is not much to recover. You may or may not be able to sue him in small claims (depends on the dollar amount). If you have to hire an attorney, that is added expense for you. By getting a judgement against him, however, if he does start working, you may be able to garnish part of his wages. Laws vary on this...so you would have to do some research in your state.

I'm afraid I have more bad news.

Even if you get a judgement against your friend, that won't solve your credit problems. The judgement will simply state that he owes YOU the money...not HSBC or the impound lot. The judge can't override your contract with HSBC or the state laws regarding the impound. The motorcycle loan and impound fees still are your responsibility. Neither HSBC nor the impound lot had a deal with your friend...they had it with you as the registered owner.

I'm sorry you made the deal you did. Whenever we've sold a used car, the first thing we insist upon is to go to the courthouse with the person who bought it and get the title from our name into their name. We don't sell vehicles without getting the money, however. Plus, I don't want the liability of still being the owner with someone else behind the wheel. Had your friend gotten into an accident, you would have been sued as the owner, agreement or no agreement.

Unfortunately, you sold your motorcycle to someone who couldn't afford to buy it, and the financial responsibility is still yours. This was a very expensive mistake on your part.

I wish you luck...

[Anonymous]

Thanks for the input, now I know I have to come up with at least 10k to pay this off. Not good for me. It's going to take a long time but it has to be done if I want this crap off my credit report. I will never ever be this generous to anyone again. Needless to say he's no longer my friend.

[guiness56]

Unfortunately, sometimes when you try to help someone out you end up getting the short end of the stick.

I co-signed an auto loan for my daughter and she defaulted and they came after me.  I am still paying for it.

She is still my daughter, always will be, but I will never co-sign for anyone again.