What Rights Do I Have Against My Relative?

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I sold a car to a relative who agreed to take over the car payments. My relative has made two late payments. What rights do I have against my relative?

[NOTE: Articles and answers on DearEsq., while written and published by lawyers, do not constitute legal advice, and no attorney-client relationship is formed by your reading of this information. You should always consult with an attorney for any legal situations.]

If you transferred the title of the vehicle and loan agreement to your relative, then you do not have any legal standing to sue for late payments. The new loan holder would have a cause of action against your relative if the loan terms include late payment penalties.

However, if you are still responsible for the car loan under the original agreement, then you will have to make sure the balance due is paid to the loan holder and handle the independent sub-loan agreement with your relative.

In this case, depending on the terms of the agreement you made with your relative, you may bring a separate cause of action. Based on the facts you provided, you stated that your relative has made the late payments. If the payment has been received, then you do not have legal grounds to sue him or her.

However, if your agreement does have terms that include late payment fees that your relative has not paid, you may be able to take him or her to small claims court to collect the fees owed.

If the late payments continue, you may need to revise some of the terms of your agreement to include a penalty/forfeiture clause for excessive late payments.



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Author: House Attorney