Earlier this year my mom's health drastically changed for the worse and I had no choice but to voluntarily repo her car. The bank that gave her the loan sent her a letter last week that I just got to today stating that they sold the car and we still owe about 8k on it due TODAY. I know I am worried but should I be? What should I do?
I plan on calling some lawyers tomorrow to get legal advice but I've read that some loaners are really petty and can garnish her wages (she doesn't work), take from her property (house is worthless), take from her retirement (doesn't have that much), or take it to court (she's disabled). I reached out to the bank months ago explaining her condition (minor stroke + memory loss + diabetes + high blood pressure) and I've taken her to the hospital and doctor's many times since. Is there something I'm missing?
For 8k it is not worth the hassle you will have if she is able to pay. It's kinda like not carrying enough insurance and totalling the car, it is very difficult to pay the balance on something that you no longer have, but the bank did give all the money based on full repayment, regardless of where the vehicle is or if it is running or not. They didn't buy a car, they loaned money.
My stepFIL and MIL were upside down on their mortgage. They both went into dementia and one also Parkinsons. I don't think we bothered contacting the mortgage bank since it's so impersonal. We paid a minimum amount towards the mortgage every month just to show "good faith" and stave off foreclosure until we got them placed into NHs. The bank pretty much left them alone. There were no assets to pursue in their case, not even a car or savings. When they were moved out to LTC we notified the bank, dropped off the keys and walked away. They had no recourse.
Contact your local area's agency on aging and they might have resources to help you get affordable legal advice. If you do go to an attorney (and be prepared for that expense) make sure it is one who specializes in elder law. In the meantime you should probably get an official cognitive eval from her main doc and get that letter. Hopefully someone in your family has durable PoA to help oversee her care going forward.
Collection agencies will threaten all sorts of fire and brimstone but they can't squeeze blood out of a stone. Do get sound legal advice for your situation for your state, though.