Vehicle repossession and IRS
(Tehachapi, California, USA )
Hello, in 2007 I co-signed for what now is an ex girlfriend (stupid move) and shortly after a brutal break up she allowed the vehicle which was in her possession to be repossessed. I was not aware that it was up for repossession until after the fact due to I resided with her at the the time of co-sign and I changed my number because of immature/threatening phone calls from my ex.
Anyhow, now over four years later I have a wife and a daughter and today my wife gets a phone call from a collector for the repossessed car telling her that we will be handed over to the IRS in order to collect on the balance from our tax return.
I understand that I had signed a legally binding contract but when I spoke with a representative of the collection agency they told me I was liable for the full balance due to the fact my ex is on welfare (because she doesn't want to get off her a$$).
This infuriated me because the one who is trying to make something of myself and not draining our economy is now liable for the full debt. I don't believe that it is fair. We both signed the contract therefore I believe we should both be held accountable for the debt. So my question is...... Can this collection agency forward my debt with them to the IRS in order to obtain for there loss? Thank you very much for your help.
Reply from DebtCollectionAnswers.com:
When you cosigned for the vehicle, you agree to be 100% responsible for the loan. And in most states, there is no requirement that a lender notify the cosigner before they repossess the vehicle. (We aren't experts on every state's repo laws, so please don't take that as legal advice.)
That's the bad news.
On the other hand, the statute of limitations for most consumer debts in California is four years. Furthermore, we don't know what the debt collector is trying to say by threatening to "turn you over the IRS." The IRS does not collect debts on behalf of private debt collectors. There are cases where income tax returns can be intercepted to pay debts, but that usually involves federally guaranteed loans like student loans.
So this debt collector's threats may be illegal, and it may be too late.
We would really encourage you to get a free consultation with a consumer law attorney as soon as possible.