Advice from the Trenches: To Your Credit

Dear C;

Just this week, I got a threatening letter from the credit department of the company I leased my car from. A few months ago, they sent me a $500 property tax bill on my car and I thought it was just to let me know they’d paid it. I leased a car in another state and that company covered the property tax. I haven’t paid this month’s bill yet, so they added that onto the total, and now they are demanding the whole amount or they are going to repossess the car and notify the credit bureaus!

I have no idea what to do about this. I’m not even sure it’s legal. The thing is, when I leased the car, I told the guy that I couldn’t afford anything more than the monthly payment and I had to know if there would be additional fees at any point. He assured me there weren’t. I repeated, to be absolutely certain, that I HAD to know, because I couldn’t afford to keep up the payments otherwise. I’m a student and I am living on fumes until I graduate. Again, he assured me.

I feel like I’ve been had and I don’t know what to do. I want to ignore the whole thing and hide the car so they can’t find it. Got any ideas?

What The

Dear What,

Yes. I’ve got some ideas. First: Don’t panic. Credit departments hire copywriters to come up with the scariest crap they can to frighten people into handing over the dough. I know, because I’ve written some. They’re worded so you are certain that at any moment thugs will arrive at your door to beat you with baseball bats. But don’t worry — that ain’t gonna happen.

Next, the bad news: Unfortunately, the property tax thing is real. In most states, the leasing company pays the property tax on the car. Logical, because it’s their property, right? You don’t own the car, they do. However, Rhode Island is one of the few states in which it is legal for the leasing company to charge property tax to the person who leases the car. If you turn your contract upside down, get a magnifying glass and spend 20 minutes looking through the fine print, you can find the clause. But it is nowhere that anyone but a title attorney would see it. And it seems that your salesman didn’t know about it either. Or did he?

You may have a case of fraud against the company. If they deliberately withheld information about the car or if they lied to you, that’s illegal. It’s your word against theirs, but it’s very possible that a small claims judge would sympathize with you rather than with the corporation. If you want to fight this thing, you’ve got a very good chance. Here’s what to do.

You need to write what’s called a “letter of demand” to the credit company. You probably can’t afford legal help, but you can find samples and templates online. I suggest you read them carefully and when you write yours, include every bit of information that supports your case. Tell the company that you will be filing a claim against them in small claims court and tell them exactly why. Give them dates, times and names.

Unfortunately, in the meantime, you are legally obligated to pay that bill, but I doubt very much that you have to pay the whole thing. You’ll need to make your monthly payment of course, but if you call the credit company, express sincere distress in a rational manner, and just don’t have the cash, they will allow you to pay whatever you can afford as an add-on to your monthly payment. If all you can cough up is ten bucks extra, they’ll take it.

Nearly every company in the world will cut you some kind of break if you call them as soon as a you get your first notice and make a sincere effort to deal with the problem. The people who get in trouble are the ones who ignore these situations and either make no effort to communicate, or, worse, call up, get nasty and refuse to cooperate. If you talk to people like people, they will act like people, not inhuman ogres. This is a general lesson you can take into life. Running away from a problem never solves it. Facing a problem and making an effort to solve it will open up a world of possibilities that might not exist otherwise.

There’s one exception to this rule: Don’t EVER get behind on payments with an insurance company. They may forgive one late payment if you are very, very lucky, but they will cut you off without blinking if you do it twice. They have no sense of humor or compassion. They don’t care about your excuses or your personal misfortunes. If you can’t pay your premiums, you’re out on your ass.

So, gird your loins and go get ‘em. This is good practice. Live and learn.

Leave a Reply

Prove that you are human *

Previous post:

Next post: