Help: Being charged interest on a loan for which I received no statements telling me of this debt for the past 15 years. Surprise!
"There is a ten year statue of limitations on debt collection, bankruptcy, etc. The problem is, if you start paying, even say, $1, you ""acknowledge"" the debt and the clock starts again. Debt claims fall under the ""he said, she said,"" rubric. In debt restructuring situations, the debtor is taught to write all their creditors DENYING debts. Some percentage of those creditors won't have the paperwork to back up their claims. Others will, and can press their claims. Then a court decides.  But in any event, a debt more than tens years old is a ""stale,"" debt. A court is likely to rule in your favor. Unless you ""acknowledge"" the debt." Investigate the statute of limitations in your area.  15 years sounds like in most places it is past the allowable time a debt collector can legally collect or report it on your credit report. The statute of limitations means you still owe the debt, but they collector can no longer use the court system to collect it from you.  They can file a lawsuit, they will just lose.  Please read up on how to handle yourself with a debt that is past the SoL, so that you don't accidentally reset the clock. What I don't know for sure is how that applies to a business, and I cannot remember ever hearing a difference between personal vs business debt, but it is best to consult a lawyer regarding it. References: This sounds like a shady trick. I would consult with a consumer debt lawyer in your area. Most county bar associations in the US have a referral service, where they recommend a local lawyer and there is a reduced fee for the initial visit. I think the statute of limitations is 10 years in most cases, but it depends on where you live. From these bare details,I think they don;t have much of a case. Go see a lawyer and don't let them harrass you.
"Bingo, great question.  I'm not the original poster, ""otherwiseyep"", but I am in the economics field (I'm a currency analyst for a Forex broker).  I also happen to strongly disagree with his posts on the origin of money.  To answer your question:  the villagers are forced to use the new notes by their government, which demands that their income taxes be paid with the new currency.  This is glossed over by otherwiseyep, which is unfortunate because it misleads people who are new to economics into believing the system of fiat money we have now is natural/emergent (created from the bottom-up) and not enforced from the top-down.  Legal tender laws enforced in each nation's courts mean that all contracts can be settled in the local fiat currency, regardless of whether the receiver of the money wants a different currency.  These laws (and the income tax) create an artificial ""root demand"" for the fiat currency, which is what gives it its value.  We don't just *decide* that green paper has value.  We are forced to accumulate it by the government.  Fiat currencies are not money.  We call them money, but in fact they are credit derivatives.  Let me explain:  A currency's value is inextricably tied to the nation's bond market.  When investors buy a nation's bonds, they are loaning that nation money.  The investor expects to receive interest payments on the bonds.  The interest rate naturally rises as the bonds are perceived to be more-risky, and naturally falls as the bonds are perceived to be less-risky.  The risk comes from the fact that governments sometimes get really close to not being able to pay their interest payments.  They get into so much debt, and their tax-revenue shrinks as their economy worsens.  That drives up the interest rate they must pay when they issue new bonds (ie add debt).  So the value of a currency comes from tax revenue (interest payments).  If a government misses an interest payment, or doesn't fully pay it, the market considers this a ""credit event"" and investors sell their bonds and freak out.  Selling bonds has the effect of driving interest rates even higher, so it's a vicious cycle.  If the government defaults, there's massive deflation because all debt denominated in that currency suddenly skyrockets due to the higher interest rates.  This creates a chain of cascading defaults - one person defaults, which leads another person, and another, and so on.  Everyone was in debt to everyone else, somewhere along the chain.  In order to counteract this deflation (which ultimately leads to the kind of depression you saw in 1930's US), governments will print print print, expanding the credit supply via the banks.  So this is what you see happening today - banks are constantly being bailed out all over the Western world, governments are cutting programs to be able to meet their interest payments, and central banks are expanding credit supplies and bailing out their buddies.  Real money has ZERO counterparty risk.  What is counterparty risk?  It's just the risk that the guy who owes you something won't honor his debt.  Gold and silver and salt and oil aren't IOU's.  So they can be real money." "So, let's take a mortgage loan that allows prepayment without penalty. Say I have a 30 year mortgage and I have paid it for 15 years. By the 16th year almost all the interest on the 30 year loan has been paid to the bank This is incorrect thinking.  On a 30 year loan, at year 15 about 2/3's of the total interest to be paid has been paid, and the principal is about 1/3 lower than the original loan amount.  You may want to play with some amortization calculators that are freely available to see this in action.   If you were to pay off the balance, at that point, you would avoid paying the remaining 1/3 of interest.   Consider a 100K 30 year mortgage at 4.5% In month two the payment breaks down with $132 going to principal, and $374 going to interest.  If, in month one, you had an extra $132 and directed it to principal, you would save $374 in interest.  That is a great ROI and why it is wonderful to get out of debt as soon as possible.   The trouble with this is of course, is that most people can barely afford the mortgage payment when it is new so lets look at the same situation in year 15. Here, $271 would go to principal, and $235 to interest.  So you would have to come up with more money to save less interest.  It is still a great ROI, but less dramatic.   If you understand the ""magic"" of compounding interest, then you can understand loans.  It is just compounding interest in reverse.  It works against you." "I'm impressed.  She must have a substantial income to agree to a $500/month car payment.  I imagine her income is about 20K per month for that to make sense.  What kind of work does she do?  To answer your question, typical lease do not work the way you describe.  Paying an extra $2000 will allow you to skip 4 payments (provided the payments were exactly $500) any time in the future.  It does not modify the terms of the lease which would include the payment amount.  Also one does not receive a fiance charge reduction benefit as with a loan.  Essentially you are providing a loan to the leasing company for free. To be explicit you cannot tell the mortgage company anything as she is applying for the loan, not you.  She can tell the mortgage company the new payment is $400, but she would be falsifying the application which is not advisable. Perhaps the mortgage company is doing her a favor.  They are indicating her life is out of control financially.  Either she is attempting to purchase way to much home or her consumer debt is out of control.  It could be a combination of both.   My first paragraph was written to be ""tongue in check"" in order to demonstrate absurdity.  Without a substantial income and an substantial net worth, a 500/month car payment is simply ridiculous.  While it is someone average, when you compare it to the average income (~54K/year) you understand why 78% of US households live paycheck-to-paycheck (are broke), and have no retirement savings. For your and her sake, please stop giving all your hard earned money to banks." 1 - For FHA loans PMI is required for mortages where there is not at least 20% equity.  Bank Financed Non-FHA loans may have other standards. If you are getting an FHA loan ,if possible put down 20%  so that you do not have to pay PMI.  That said your PMI costs should be reduced by the size of your down payment since the PMI covers the difference between your equity value (Based on the appraisal at time of purchase) and 20% equity value of the home. So if you buy a home for 425k(assuming 100% appraisal price) 20% equity would be 85k.  So if you put 10% down you would be paying PMI until you accrue an addition 42500 in equity.  And you will be paying PMI on that for about 12 years(typical on 30 year mortgage) or until you refinance(having home appraised at higher value than purchase price where you would have 20% equity).  There are ways to get out of PMI early but few banks are willing to help you through the hoops unless you refinance(and pay more closing costs). 2 - Different banks offer better rates or other benefits for paying points.  We paid $300 for a 1.5% reduction in our interest rate (less than 1%) but it was called a point. We were offered a few other points (.25% for 2500 and an one time on demand interest rate adjustment for ~3k) but declined but they may make more sense on a 425k home than our more modest one.  You can talk to a banker about this now, get preapproved(which helps with getting offers accepted sometimes), and find out more details about the mortgage they will offer you.  This meeting should be free(I would say will but some bank would charge just to prove me wrong) and help answer your questions more authoritatively than anyone here can.   3 - The costs will come out of your down payment.  So if you put down 42.5k down your costs will come out of that.  So you will probably end up with 30~35k being applied towards your purchase price with the rest going for costs.  You can tell the banker you want to put 10% towards the price and the banker will give you a down payment probably around 50k to cover costs etc.  (My figures are hopefully intentionally high better to find out that it will cost less than my guesstimate than get your hopes up just to find out the costs are higher than expected.) "The lead story here is you owe $12,000 on a car worth $6000!!  That is an appalling situation and worth a lot to get out of it.  ($6000, or a great deal more if the car is out of warranty and you are at risk of a major repair too.)  I'm sorry if it feels like the payments you've made so far are wasted; often the numbers do work out like this, and you did get use of the car for that time period. Now comes an ""adversary"", who is threatening to snatch the car away from you.  I have to imagine they are emotionally motivated.  How convenient :) Let them take it.  But it's important to fully understand their motivations here.  Because financially speaking, the smart play is to manage the situation so they take the car. Preferably unbeknownst that the car is upside down.  Whatever their motivation is, give them enough of a fight; keep them wrapped up in emotions while your eye is on the numbers.  Let them win the battle; you win the war: make sure the legal details put you in the clear of it.  Ideally, do this with consent with the grandfather ""in response to his direct family's wishes"", but keep up the theater of being really mad about it.  Don't tell anyone for 7 years, until the statute of limitations has passed and you can't be sued for it. Eventually they'll figure out they took a $6000 loss taking the car from  you, and want to talk with you about that.  Stay with blind rage at how they took my car.  If they try to explain what ""upside down"" is, feign ignorance and get even madder, say they're lying and they won, why don't they let it go?  If they ask for money, say they're swindling. ""You forced me, I didn't have a choice"".  (which happens to be a good defense.  They wanted it so bad; they shoulda done their homework.  Since they were coercive it's not your job to disclose, nor your job to even know.)  If they want you to take the car back, say ""can't, you forced me to buy another and I have to make payments on that one now.""" "This is not really the focus of your question, but it's worth noting that if you live in the United States (which your profile says you do), there are tax implications for you (but not for your children), depending on whether or not you charge your children (enough) interest.  If you charge less interest than the appropriate Applicable Federal Rate (for May 2016, at least 0.67%), you must pay taxes on the interest payments you would have received from the debtor if you had charged the AFR, provided that the loan is for $10,001 or more (p. 7). This is referred to as ""imputed"" income." "You won't be able to sell the car with a lien outstanding on it, and whoever the lender is, they're almost certain to have a lien on the car.  You would have to pay the car off first and obtain a clear title, then you could sell it. When you took out the loan, did you not receive a copy of the finance contract?  I can't imagine you would have taken on a loan without signing paperwork and receiving your own copy at the time.   If the company you're dealing with is the lender, they are obligated by law to furnish you with a copy of the finance contract (all part of ""truth in lending"" laws) upon request.  It sounds to me like they know they're charging you an illegally high (called ""usury"") interest rate, and if you have a copy of the contract then you would have proof of it.  They'll do everything they can to prevent you from obtaining it, unless you have some help. I would start by filing a complaint with the Better Business Bureau, because if they want to keep their reputation intact then they'll have to respond to your complaint.   I would also contact the state consumer protection bureau (and/or the attorney general's office) in your state and ask them to look into the matter, and I would see if there are any local consumer watchdogs (local television stations are a good source for this) who can contact the lender on your behalf.  Knowing they have so many people looking into this could bring enough pressure for them to give you what you're asking for and be more cooperative with you. As has been pointed out, keep a good, detailed written record of all your contacts with the lender and, as also pointed out, start limiting your contacts to written letters (certified, return receipt requested) so that you have documentation of your efforts. Companies like this succeed only because they prey on the fact many people either don't know their rights or are too intimidated to assert them.  Don't let these guys bully you, and don't take ""no"" for an answer until you get what you're after. Another option might be to talk to a credit union or a bank (if you have decent credit) about taking out a loan with them to pay off the car so you can get this finance company out of your life." You would need to check the original mortgage papers you signed with the originators.  Chances are you agreed to allow the mortgage to be sold and serviced by other parties. Refinancing would also put you in the same boat unless you got them to take that clause out of the mortgage/refinance papers. Also, chances are most small banks and originators simply can not keep mortgages on their books. There are also third parties that service loans too that do not actually own the mortgages as well. This is another party that could be involved out of many in your mortgage.  I would also not worry about 127/139 complaints out of 1,100,000 loans. Most probably were underwater on their mortgage but I am sure a few are legitimate complaints.  Banks make mistakes (I know right!).  Anyway, good luck and let me know if you find out anything different.