Credit Acceptance Settlement: Lawsuits, Repossession, and Debt Relief

Credit Acceptance Settlements can be a complex and overwhelming process, especially if you're dealing with lawsuits, repossession, or debt relief. Credit Acceptance Corporation, a subprime auto lender, has been involved in numerous lawsuits and controversies over the years.

In 2013, Credit Acceptance Corporation agreed to a $14 million settlement with the Consumer Financial Protection Bureau (CFPB) to resolve allegations of deceptive lending practices. This settlement was a result of the CFPB's investigation into Credit Acceptance's business practices.

The company has also been accused of engaging in aggressive repossession tactics, leading to lawsuits and complaints from consumers. In some cases, Credit Acceptance has been known to repossess vehicles without proper notice or due process.

If you're struggling with debt from Credit Acceptance, it's essential to understand your options for debt relief.

Credit Acceptance has been involved in a class action lawsuit filed by Lead Plaintiffs Ontario Provincial Council of Carpenters’ Pension Trust Fund and Millwright Regional Council of Ontario Pension Trust Fund.

The lawsuit, Palm Tran, Inc. Amalgamated Transit Union Loc. 1577 Pension Plan v. Credit Acceptance Corp., alleges violations of the Federal Securities Laws. Lead Plaintiffs filed an Amended Class Action Complaint on July 22, 2021.

Credit Acceptance moved to dismiss all claims against them, but Lead Plaintiffs opposed the motion. The case went through several stages, including a mediation session on April 1, 2022, where Lead Plaintiffs and Defendants reached an agreement in principle to settle the claims.

Palm Tran, Inc. v. Corp is a significant case in the Credit Acceptance lawsuits.

The case, Palm Tran, Inc. Amalgamated Transit Union Loc. 1577 Pension Plan v. Credit Acceptance Corp, was filed on July 22, 2021, by Lead Plaintiffs Ontario Provincial Council of Carpenters’ Pension Trust Fund and Millwright Regional Council of Ontario Pension Trust Fund.

The complaint alleged violations of the Federal Securities Laws, specifically Sections 10(b) and 20(a) of the Securities Exchange Act.

Defendants moved to dismiss all claims on September 2, 2021, and a reply in further support of their Motion to Dismiss was filed on November 11, 2021.

A Mediator helped Lead Plaintiffs and Defendants reach an agreement in principle to settle the claims against the Defendants on June 14, 2022.

The settlement was subsequently negotiated and a Stipulation was executed on August 24, 2022.

If you purchased Credit Acceptance common stock during the Class Period from May 4, 2018, through August 28, 2020, you may be entitled to a payment from a class action settlement.

To be eligible for a payment, you must submit a Claim Form to the Claims Administrator by December 2, 2022.

The Court approved the Settlement and Plan of Allocation, and awarded attorneys’ fees and expenses after a Settlement Hearing on December 7, 2022.

A different take: Do Car Dealers Accept Credit Cards for down Payment

You can contest the claims made by Credit Acceptance if you believe the debt is invalid or there are significant weaknesses in its case.

You may have evidence that the amount claimed is inaccurate or that the debt does not belong to you.

Contesting the lawsuit can be a viable option if you have a strong defense. For example, you may have proof that the debt was already paid or that Credit Acceptance has no right to collect it.

If successful, Credit Acceptance may drop the lawsuit, or you could win the case in court.

Discover more: Credit Card Settlement Lawsuit

Credit Acceptance Corporation can repossess your car if you fail to make payments according to your loan's terms. There is no grace period for missed payments, and if a payment is more than 30 days late, Credit Acceptance will report your account as delinquent.

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 if the sale doesn't cover the loan balance. This typically happens after missed payments, repossession of the vehicle, and attempts to collect the remaining balance after selling your car.

Check this out: Rental Car Companies Accept Chime Credit Card

If you're struggling to make payments, Credit Acceptance Corporation can repossess 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.

There's no grace period for missed payments, so if a payment is more than 30 days late after its due date, Credit Acceptance will report your account as delinquent.

Multiple missed payments and failed collection efforts can lead to repossession.

Credit Acceptance's website doesn't state exactly when it will repossess your vehicle, but it's likely to occur after multiple missed payments and failed collection efforts.

If Credit Acceptance repossesses your vehicle, it may sell your car to recover the remaining loan balance. The sale price might not cover the total amount owed, leaving you responsible for the remaining balance.

You might still be on the hook for the remaining balance even after the car is sold. Credit Acceptance may sue you for the rest.

See what others are reading: Car Rental Agencies That Accept Prepaid Debit Cards

Credit Acceptance Corporation generally sues consumers due to defaulted auto loans. This typically happens after missed payments, repossession of the vehicle, and attempts to collect the remaining balance after selling your car.

If you fail to make your loan payments, Credit Acceptance may take legal action to recover the outstanding debt. Credit Acceptance may obtain a default judgment against you if you don't respond to the lawsuit.

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.

Bankruptcy can provide financial relief by discharging unsecured debts or restructuring your debt with a manageable payment plan.

You can consider bankruptcy if you're dealing with significant financial hardship beyond the Credit Acceptance lawsuit. Bankruptcy also stops debt collection efforts, including litigation.

Paying off charge-offs can improve your credit scores, as seen in the case of someone who settled all but one charge-off before going to underwriting. This can result in a significant score increase, almost 100 points in this instance.

Negotiate a settlement with the creditor, as Credit Acceptance Corporation may agree to a reduced lump-sum payment to settle the debt.

Settling the debt is generally quicker and less expensive than going to court, and it's a good option if you have a strong financial situation and can afford to pay a lump sum.

Even if Credit Acceptance Corporation filed the lawsuit against you, they likely want to avoid court too, making settlement a viable option.

Paying off old credit charge-offs can significantly improve your credit scores, with one person's scores increasing by almost 100 points after paying off all their CO balances.

A good lender or broker can help you determine the best mortgage product for your situation and walk you through score improvement scenarios, as they did for one person who paid off their CO balances before going to underwriting.

On a similar theme: Credit Card Settlement Good or Bad

Bankruptcy can provide financial relief by discharging unsecured debts or restructuring your debt with a manageable payment plan.

Bankruptcy stops debt collection efforts, including litigation, giving you a much-needed break from creditor harassment.

You may consider bankruptcy if you're dealing with significant financial hardship beyond the Credit Acceptance lawsuit.

Bankruptcy can help you get back on your feet and regain control of your finances, but it's essential to discuss your situation with a professional.

In Texas, wage garnishment is not allowed for most consumer debts, including auto loans. This means that if Credit Acceptance Corporation gets a judgment against you, it can't seek to garnish your wages.

However, Credit Acceptance Corporation may pursue bank garnishment, which involves freezing and seizing money directly from your bank accounts to pay off the debt. Your paycheck can be seized once it's deposited into your account.

Instead of wage garnishment, Credit Acceptance Corporation may also pursue property liens or property seizure to cover the debt. This can be a serious consequence of not paying your debt.

A different take: Bank of America Settlement Credit Card