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Very inconvenient situation, RESOLVED

Hi everyone,

I have a seriously unfortunate situation and I’m wondering if anyone could help point me in the right direction. It’s a really long and drawn out story and I hope someone is willing to read through and help me.

In 2015, I financed a used 2014 Hyundai Elantra. I rushed into the deal because my old car was falling apart and I needed a new one quickly. The insurance and loan payments were well over my budget but I trudged through it anyway.

I failed to renew my auto insurance in 2016 but continued driving the car, then one June morning in 2017, I got into a major accident that totaled my car but I was at fault. Ouch. I know. While me and the other person involved in the accident waited for the police to arrive, I debated where the car would go: it couldn’t go to my mother’s boyfriend’s house, who was just down the street, because he already had other cars on his property and the town would be contacting him further.

So I called a colleague who’s father owned a tow service on the other side of town. They brought it back to their shop, but with no insurance on the Elantra, there was no representative to come out and assess the damages. So it sat there. The only choice was to junk the car but I needed the title. I of course did not have this because the loan for the Elantra is to this day outstanding (I’m actively making punctual payments on it) so the shop apparently pulled some strings and junked it on my behalf. I closed the registration, they helped me cancel the plates, etc. and that was that. Or so I thought.

Now a few weeks ago I got a notice for taxes due on the Elantra. I contacted the tow shop for the junk receipt or some kind of paperwork I could submit to the tax assessor since the car doesn’t physically exist anymore. But they claim they never checked in the vehicle, had any record of it being at the location, or kept paperwork on it. They never gave me a junk receipt.

**So if the tow shop can’t help me produce paperwork to “close out” the Elantra, who should I **
contact? The DMV? The dealership I originally bought the car from? The issuing bank for the loan I’m still paying?

I take full responsibility and fault for this entire situation - I didn’t think my actions through from the beginning when I obtained the Elantra. But I’m trying to make things right and do everything I can to square away this situation as best as I can. If anyone could point me in the right direction of how to handle this, I would be so grateful. I really don’t want to keep paying taxes on a car I don’t have anymore.

If anyone needs further clarification, or have further questions, I’m happy to discuss it.

Thank you so much in advance to whoever reads this and can help.

The only way you’re going to clear the title is pay off the loan. Or file bankruptcy.

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You have a legal problem so any advice from an forum by someone’s screen name is useless. By taxes I guess you mean tags and registration. You also did not say where you are located . You need an attorney because you disposed of a vehicle with a lien on it which is illegal .

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You need legal advice from a lawyer in your location. Period.

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Several states - e.g., Virginia - charge annual property taxes on cars, in addition to, you know, actual property. It’s a stupid practice, but this may be what the OP is referring to.

With that said…if this is your situation, I thought the title-holder was supposed to pay property taxes on the car? Since they’re the ones who technically own the car until it’s paid off. Are they aware that the car was junked? I’m surprised they would just let you keep making payments, since they’ve lost their collateral. But yeah, this is definitely something you need to consult an attorney about.

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Here’s another very strong vote for consulting an attorney. You first didn’t insure the collateral for a loan, which I’m sure you legally agreed to do. Then, making things far worse, you destroyed that collateral, which I’m sure you also legally agreed not to do. You certainly don’t want to inform the finance company or the dealer of anything that happened here before talking to the attorney, as they’ll probably come after you.

I’m actually more worried about another issue here. If there was a personal injury involved in this major accident and you didn’t have liability insurance, you could be sued for a large amount of money, possibly with many years of your future earnings garnished if necessary. You definitely need an attorney to represent you in that case.

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I’m not going to read the other responses right now but there are two things. First, to settle the tax issue, fill out an affidavit or have a lawyer do it that states that you no longer own the car as of such and such a date. Title or no, that is your sworn testimony.

On the no insurance issue, depending on if you dealt with a bank or not, that normally have an open insurance policy to protect themselves just in cases such as these. It is a very high cost policy when they enact it but it should cover the value of the car. Go talk to the bank. Of course you violated your loan agreement by not having insurance but it wouldn’t be the first time. Is there a judgement against you for the damage to the other car though? Can’t help with that but they probably wrote you off as uncollectible.

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How do I fill out an affidavit without consulting a lawyer? Can I just hand write it? Or is it best to consult one? Thank you for the information…

I think you’d want to talk to a general lawyer. A lot will provide a free 30 minute consultation but should be someone local that deals with tax issues. To, from, pertinent car information, on such and such the car was totaled and sold to such and such. You have not had possession since, etc. etc. Just the facts mam but all the facts, signed and notorized. Certified mail, keep a copy etc. What are they gonna do, sue you, take you to tax court? If so, show the judge the document.

You might have raised the red flag though by continuing to pay on it so there was no record of a title change, depending on how much they check prior. These are really stupid tax laws though. South Dakota used to have it too but I ignored them when I was there because I wasn’t a legal resident and never heard anymore. It’s been 50 years now so think I’m OK. Good luck. Bad deal. Kinda reminds me why I used to pay the kid’s insurance myself to make sure we were always covered.

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Again, just out of insurance class last week, I’m sure they are a “no fault” state. In a no fault state, medical costs are paid by your own insurance not the other guy’s. So if you are injured, your own insurance pays. It is intended to simplify the whole process and eliminate the need for negotiations back and forth. Damage to the other car though would be all that she’d be on the hook for, but like I said, the other person’s collision or comprehensive coverage would take care of it, minus the deductible. The other insurance company could come back though through subrogation to try and recover. But likely they’ll write it off given what looks like someone with maybe a fragile budget. But yeah, a 30 minute free consultation with a lawyer would be a good thing to do.

The OP might very well need a lawyer – yet s/he should do as much homework before consulting one.
Before listing some examples, the OP should know that this is all a matter of state (not federal) law and that s/he should do homework based on the state in which the car was last registered / titled.

Homework examples include:
“I closed the registration, they helped me cancel the plates, etc” – when was this? Is there any paperwork for this? That paperwork might be useful in telling the tax authority that the vehicle is no longer in the state. (In some states, the property tax on vehicles is collected with the registration – is that the case in this state? Also note that there are situations where a vehicle is titled in one state but registered in another.)

When was the last time taxes were paid on the car? 2017? 2016? Could the tax notice now be trying to collect back taxes?

Is there paperwork (forms) for telling the state when a car has left the state (which technically also applies to a car that is no longer in existence in the state or any other state)?

But the car was never sold, the OP is no longer in possession of the car but who besides the register owner should be responsible for the taxes?

If it was taking up space in their parking lot they could have had the car impounded but then you and the lien holder would have been notified of the storage fees and a lien sale. The shop may have given the car away and someone is selling parts off of it.

In my state if there is no insurance involved and the damage exceeds a certain percentage of the vehicles value the owner must apply for a salvage title, you may have violated that requirement if it is necessary in your state.

A person with a wrecked vehicle may be able to have the value assessed to reduce the tax amount but in your case you need to find your car.

I dunno, might be a distinction without a difference. Whether her name is on the title or not, she sold the car to the junk dealer. She has no interest in it regardless of the paper. Even so, what would be the property tax in Virginia on a junked car? For or five dollars?

If it’s any help, I’m in Connecticut.

The car was abandon, the OP could not sell the car without a clear title.

Does not matter where you are . You need a lawyer . You failed to keep insurance on a vehicle with a lien against , that is a contract violation. You had mortgaged property disposed of and who knows what else problems you may have.

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The car was destroyed. It is of no value, title or not. However it does look like Connecticut has a city property tax with specific forms to fill out for junked cars with percentages of values discharged etc. So gotta check with the proper city to determine the actual assessment. After that, maybe time to move.

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This specific situation is my only problem here. Thanks for the information and your concern.

Bing, is there any way I could confer with you privately?

There must be some form or procedure for declaring the car inoperable, “in storage”, or otherwise out of your possession. People store inoperable cars for a variety of reasons, and people sometimes sell vehicles for scrap–with or without the title–and the buyer fails to file for a certificate of junking with the state. Similarly, cars are sometimes repossessed, and found to be of such little value that they are subsequently junked or sold for scrap. Again, the eventual buyer, or lender may not file any official record of the sale with the state.

Here in Arizona, there are no personal property taxes, however the state actively checks to make sure that all vehicles which are registered have valid insurance, and will send a letter threatening to suspend your driver’s license and all of your vehicle registrations if their computer system sees that one or more vehicles are not insured.

However, if a vehicle is in fact being stored, or is currently inoperable, there is a simple form which you can fill out to notify the state of that fact. Once filed, it is no longer necessary to register, insure, or emission test this vehicle until such time as you choose to bring it out of non-operable status. This is useful to people who wish to store old cars, which don’t run, either to use as a parts source, or for eventual repair and restoration.

At this point, I would suggest contacting the taxing body (either the city or state) and explaining the situation. If they require some documentation from the lender, you really have nothing to lose at this point by contacting them. The fact that you have already paid more than a year of payments on a car which has long since been junked should convince them that you are willing to keep paying.

That being said, if this car loan was such a burden that you couldn’t afford insurance, I am amazed you didn’t file for Chapter 7 bankruptcy the moment this accident occurred. It doesn’t seem smart to continue paying on a car which has been scrapped when money is super-tight.