We understand that being sued by Credit Acceptance Corporation can be a stressful experience, especially when you are already dealing with financial challenges. You may wonder, “Credit Acceptance is suing me for debt collection. What should I do?” In the article below, our Texas debt collection defense lawyers discuss what you should know about Credit Acceptance and your legal options for resolving a lawsuit.
What Is Credit Acceptance Corporation?
Credit Acceptance Corporation is an indirect auto lender and subprime auto lender based in Southfield, Michigan. Founded in 1972, Credit Acceptance helps finance consumers with poor or limited credit, enabling many borrowers them to purchase used and new vehicles through a nationwide network of affiliated car dealers.
Instead of lending directly to consumers, Credit Acceptance Corporation offers its financing programs through car dealers enrolled with it. Credit Acceptance reviews the loan agreement when a consumer or business applies for auto financing with a partnered dealer. Credit Acceptance Corp is known for offering high-cost loans with high interest rates and hidden costs.
If approved, it pays the dealer per their own agreement. Then, the consumer makes payments directly to Credit Acceptance according to the terms of the loan agreement.
The company claims to help borrowers with poor credit or little to no credit access auto financing and give them the opportunity to improve their credit in the process. However, these loans often have unfavorable loan terms and high interest rates. It is unfortunately common for borrowers to default. Credit Acceptance Corp has come under significant scrutiny and legal action from investors and the Consumer Financial Protection Bureau (CFPB) for its lack of transparency and predatory lending practices.
When Will Credit Acceptance Repo Your Car?
In Texas, Credit Acceptance Corporation holds the title to your vehicle until you pay off your loan contract or it releases the lien. It can repossess your car if you fail to make payments according to your loan’s terms.
According to Credit Acceptance’s website, there is no grace period for missed payments. If a payment is more than 30 days late after its due date, Credit Acceptance will report your account as delinquent.
Credit Acceptance Corporation has been accused of using aggressive debt collection tactics, which can include frequent calls and threats of legal action.
Although Credit Acceptance’s website does not state when it will repossess your vehicle, it may likely occur after multiple missed payments and failed collection efforts.
What Happens After Credit Acceptance Repossesses Your Vehicle?
If Credit Acceptance repossesses your vehicle, it may sell your car to recover the remaining loan balance. Keep in mind that if the sale does not cover the total amount owed, you might still be responsible for the remaining balance. Credit Acceptance may sue you for the rest.
Credit Acceptance Corporation generally sues consumers due to defaulted auto loans. If you fail to make your loan payments, Credit Acceptance may take legal action to recover the outstanding debt. This typically happens after missed payments, repossession of the vehicle, and attempts to collect the remaining balance after selling your car.
Generally, you will hear from Credit Acceptance Corporation’s attorney if it is suing you. It often hires the law firm Javitch Block, LLC for its Texas debt collection lawsuits.
If you are being sued by Credit Acceptance, do not ignore the lawsuit. Credit Acceptance may obtain a default judgment against you if you do not respond to the lawsuit. This means it wins the case because you did not respond to the lawsuit or appear in court. If this happens, then the court will likely order you to pay the debt, including any additional interest, costs, and legal fees.
Your trouble does not end after a court judgment. With a court judgment, Credit Acceptance can take further legal action against you. It may seek bank garnishment, property liens, or property seizure to obtain compensation.
This infographic outlines crucial steps to protect yourself and handle auto loan debt. Learn about the common reasons for the lawsuit, potential legal actions they might take, your options for challenging or negotiating the debt, and why it’s vital to respond to avoid extra costs.
What Are My Legal Options for Dealing With a Debt Collection Lawsuit?
When sued by Credit Acceptance Corporation, you may have a few legal options available to you. We recommend working with an experienced Texas debt collection defense lawyer who can help you determine the best course of action for moving forward. The Consumer Financial Protection Act provides a legal basis for challenging unfair lending and debt collection practices. However, generally, you may consider the following legal options:
Challenge the lawsuit.
You can contest the claims made by Credit Acceptance if you believe the debt is invalid or there are significant weaknesses in its case. For example, you may have evidence that the amount claimed is inaccurate or that the debt does not belong to you. If successful, Credit Acceptance may drop the lawsuit, or you could win the case in court.
Negotiate a settlement.
Depending on the strength of the claims against you and your financial situation, negotiating a settlement may be the best option. Settling the debt is generally quicker and less expensive than going to court. Even though Credit Acceptance filed the lawsuit against you, it likely wants to avoid court, too. As a result, Credit Acceptance Corporation may agree to a reduced lump-sum payment to settle the debt or work with you on a manageable payment plan. An experienced Texas debt defense lawyer can negotiate on your behalf to protect your best interests and ensure the terms are fair.
Bankruptcy.
If you are dealing with significant financial hardship beyond the Credit Acceptance lawsuit, you may consider whether bankruptcy may be a viable option. Bankruptcy can provide financial relief by discharging unsecured debts or restructuring your debt with a manageable payment plan. Bankruptcy also stops debt collection efforts, including litigation.
Do not hesitate to schedule a free, no-obligation consultation with our law firm to discuss your situation.
Can Credit Acceptance Garnish Wages in Texas?
In Texas, wage garnishment for most consumer debts, including auto loans, is not allowed. Therefore, if Credit Acceptance Corporation gets a judgment against you, it cannot seek to garnish your wages. However, that does not leave it without options. Lawsuits against Credit Acceptance Corporation may be filed in various jurisdictions, including the Southern District, depending on the location of the borrower.
Instead of wage garnishment, it may pursue bank garnishment. Bank garnishment involves freezing and seizing money directly from your bank accounts to pay off the debt. This includes your paycheck once deposited into your account. Credit Acceptance Corporation may also pursue property liens or property seizure to cover the debt.
Schedule a Free Consultation With Our Texas Debt Collection Defense Lawyers
Is Credit Acceptance Corporation suing you for debt collection? If so, you have legal options to resolve the lawsuit, and you do not have to face this challenge alone.
At Warren & Migliaccio, we defend Texans facing debt collection lawsuits from creditors and debt collectors. We take cases across the state. If you are facing a Credit Acceptance lawsuit, do not hesitate to schedule a free consultation with us.
During a consultation, we will review the claims against you and help you understand your best options for moving forward. We will also explain what you can expect when you choose us to represent you for your case. Call us at (888) 584-9614 or contact us online today.
