You have been contacted by a company named Credit Acceptance Corporation and want to verify who they are. Their entire business is as an indirect lender for automobile loans. Many people in the St. Paul/ Minneapolis area have used them for a car loan.
What Does Indirect Lender Mean?
As an indirect lender, they are not contracting directly with you, but do service the loan. The only way to deal with them is through an automobile dealer that contracts with them.
Why Would a Dealer Want to Contract With Them?
More cars can be sold. The dealer also shares in some of the profit of the interest rate and when the loan is paid off.
Why Would You Want This Type of Loan?
If you have a low credit score, bad credit or no credit, you can qualify with them to purchase a car if you are using a dealer that is contracted with them. The dealer is responsible for helping you select a suitable car, setting the interest rate, terms and payment amount of the loan.
What They Say About Themselves
Changing lives since 1972. Credit Acceptance Corporation offers a loan program to car dealers so more cars can be sold and consumers can get a loan to purchase a vehicle regardless of their credit qualifications.
Why Do Business With Them?
If you have done business with them it probably means that you were already struggling with debt and had a low credit score. Or you had not established enough credit to have a credit score. This can work in your favor to improve or establish credit. Making the payments on time can build your credit.
Also, if you are already in an active Chapter 7 or 13 bankruptcy program, they will extend credit to you.
What Can Go Wrong?
They do not offer any grace period on the payment due date. One day late and the payment is counted as late because of no grace period. The payment due date cannot be changed after it is established.
If you have a change to a lower income amount, they may work with you, but if you are unable to make payments you will be in default.
Should I Refinance My House to Pay Debt?
If you own a home you are paying a mortgage on, many times a consumer will be lured into refinancing the mortgage with designated cash out feature to get another debt paid off and have financing with a lower payment and interest rate. What needs to be remembered is that a 3-year debt may now be a 30-year debt. You are not really saving and you are putting ownership of your house at risk if something should go wrong. Filing Bankruptcycan actually be more secure and wiser. The debt holder will usually be more willing to work with you if you tell them you are thinking about filing bankruptcy.
Can I Get My Money Back if They Have Taken It?
If they have taken money from your bank account or paycheck without you agreeing to it, usually the answer is yes. Minnesota law allows the refund of money taken within 90 days previous to filing for bankruptcy. It will take a few months, and there are various rules concerning this.
What Should You Do?
So you have been sued by Credit Acceptance Corporation. Because they are already dealing with a risky loan product, they have systems set up to relentlessly pursue you. Without hesitation, the best course of action is to file for bankruptcy with Walker & Walker to protect your interests. Contact us today to learn how filing bankruptcy works for you.