Should I get a lawyer and do I have a chance at winning?

Question

Last year I bought a brand new motorcycle in NY. All of the paperwork I signed said it was financed so I assumed I had full coverage.....since that is required when financing a vehicle. Shortly after, I got a credit card statement in the mail with a large balance. I realized that it was put on a credit card and not financed through a bank. Within 2 weeks the bike was stolen and totalled. I tried to make a claim through my insurance company, only to find out I didn't have full coverage so theft wasn't covered. I never even made my first payment and I was so angry that I never made one payment after that. Well now a collection agency is threatening to take me to court. First off, I don't have the money to pay it nor do I feel I should have to pay it since the company lied about everything. Can they sue me or are they just trying to scare me? What should I do?

Answer 1

    Collection agencies are always heavy handed and they make threats they usually are unable to back up. But just to be on the safe side I suggest that you contact a civil/contract attorney to get a more informed answer than what you will get in this forum.

Answer 2

First, whenever you purchase a vehicle, you are responsible for notifying your insurance carrier and obtaining appropriate insurance for the vehicle (including theft).  Even if the bike had been financed, neither the dealership nor the finance company would be responsible for insurance coverage.

Once you accepted possession of the bike, it was your responsibility and the fact that it was stolen does not change that.  

Yes, you still owe the money for the bike.  Yes, they can sue you.  No, they are not just threatening.  In all likelihood the credit card company has assigned its claim to the money to the collection agency so the collection agency is now your legal creditor on this debt.  And collection agencies are ruthless so you can count on a lawsuit unless you deal with this problem.

If you had purchase coverage on the credit card, the credit card company might have paid or written off part of the debt after the theft, but now that you are in default, any coverage you might have had would likely be void.  

You need to contact the collection agency and set up a payment schedule.  Be firm - let them know that you don't have the money to pay the debt all at once and that you need to make payments.  Also ask them if they will accept less than full value in settlement since the bike was stolen.  Some will negotiate because they realize that some money is better than no money.  And settling before incurring attorneys fees will net them more money so do this right away.  Remember, if they obtain a judgment against you they can garnish your wages and file a lien against any real property you own.  

Also, you must have given the dealership the credit card for the purchase of the bike and that was your choice.  You should have made sure you were actually financing the bike if that was what you wanted, but, again, that would not have obligated them or the finance company in any way to provide insurance coverage.  

The whole situation sucks, but when you make a major purchase like this, it is your responsibility to make sure you communicate with the dealership regarding financing, etc.

Finally, why did you give them your credit card?  Was it for the purpose of verifying your credit so they could set up the financing?  Did they then charge the credit card without your knowledge or permission?  

If you clearly specified you were seeking financing (i.e. a loan through a financing company or bank which a dealership will often set up for you) and they charged your credit card anyway, you mayhave a valid claim against the dealership, but unless you have some type of proof, it would be your word against theirs.  It might be worth the effort to consult and attorney on this.  They will often give you an initial consultation free.  

One last note - if you have homeowner's insurance, you might find out if they would cover the theft.  Sometimes they do.

Good luck.

Answer 3

let me ask you this. when you say you made a claim through your insurance company, did you have insurance on another vehicle at the time? and if so was it full coverage? if so depending on when you bought the bike and when you suffered the loss, your former insurance company may be liable. many auto policies offer temporary coverage on new vehicle purchases for around 30 days or so without actually have to write a policy on it. it would seem to me that that would be your only option to help you out. get out your policyholder's handbook and start reading.

Answer 4

Check your prior insurance company policy carefully.  Usually when you buy a new vehicle (if you had prior insurance) you will be given a window to advise them of the new purchase while still be covered on the new vehcile.  If not, you are toast on the total loss issue.

You obviously gave them a credit card at the time of purchase... how could you assume it was going to be separately financed?  What does your sales contract say.  Your assumption means nothing.  If the contract says financed through a bank then you may have a claim for alternate financing... but if after you purchased the car through bank financing and the bank thereafter denied you AND then the dealer put the charge on you credit card... you would definately have a claim and may get completely out of the purchase.

READ YOUR CONTRACT CAREFULLY

Answer 5

You certainly need an attorney. The Credit Card company is suing you and they had nothing to do with what insurance coverage you had or didn't have. You are talking two different companies involved. read your contract with the Dealer to find out exactly what type of insurance they were charging you for. It should have been full coverage since this is required. I feel that the Dealership is at fault but you have a more pressing issue now with the Credit card company.

Answer 6

Talk to a lawyer, bottom line insurance companies don't care how you feel or if it's fair or not.  You may have to just suck it up and have to pay for everything.  

Answer 7

No your screwed. Why would you assume you have full coverage insurance? You called your insurance company after the fact it was stolen and totaled, why not call them before you bought the bike? If it was placed on a credit card you might call them as some credit cards cover this kind of issue. Otherwise you are on the hook for the bike, and if you now don't have the money to pay for it maybe you shouldn't have bought it in the first place.  

Answer 8

Generally speaking, if you need to ask if you need a lawyer, you do.  I think you need to speak to a lawyer.

Answer 9

unfortunately ignorance wont save you. if you financed it over a year ago. the people you bought it from got u a credit card to cover it not a loan.

meanwhile, they were in charge of insurance and payments?

right, how old are you & why are parents not teaching their kids?

Answer 10

the honest did you read what you sign? just because they tell you have full coverage does mean you have full coverage always read what you signed . the insurance will always try and hurry you up to sign the bottom line. You might have just signed liability only. The chances in you winning are probably zero in top of that if you have hired a lawyer you will be more of out of pocket expenses.

you probably need to make arrangement for a payment plan before they start garnishing your wages They can sue you. Sorry to say

good luck

Answer 11

If you agreed to the financing in writing, they can sue and win. The bike being totaled without proper coverage is irrelevant, since that was your responsibility.

You should consult a lawyer to see what your options now are.