What is the name of your state? California
In October of last year I had a car accident (my fault) where I totaled my car. I had GAP insurance at the time and my auto loan was current.
I reported it to my insurance which deemed my car a total loss and paid most of the amount owed to my finance company Roadloans. Approximately a $5000 balance remained. Roadloans then initiated a GAP claim with Virtual Lending Source who took months to resolve the matter and paid out only about $1,300 of the balance due.
While VLS was researching the claim I went out and bought a new car and did not continue sending payments to Roadloans because my understanding of GAP insurance was that it would take care of the unpaid balance. I now receive a letter from Roadloans stating I have a balance owed to them of over $3,000 and if I don't take care of the balance they will begin to garnish my wages.
I was upfront with Roadloans about not making payments on a totaled car because I now had an obligation to pay the new car and could not make payments on two cars.
Is it legal for the GAP insurance to not cover the balance due if at the time of loss I had not defaulted on my loan?
And can Roadloans really garnish my wages over this balance due?
Is there anything I can do to prevent this from happening. Roadloans has already flagged this account as a write off and reflected it as such on my credit. I don't want this matter to get any worse but I don't really think it is fair and feel as though someone is trying to take advantage of the situation.What is the name of your state?