Car Title Loans

If you’re not fully satisfied with a product or service you’ve obtained, frustrations can be running high at times. When it comes to consumer loans like title loans serviced by LoanMart, you may start to wonder how you can get out of your loan, or even consider filing your own lawsuit. But, is a lawsuit always your best option? Keep reading to find out more about some of the lesser-known potential issues when considering whether to file a lawsuit, and some of the alternatives that may be available to you.

What Are The Hidden Costs and Risks of Filing a Lawsuit?

As with most things in life, a seemingly good deal or decision can turn negative when you factor in all the potential hidden costs and risks that you may encounter. Here are some of the hidden costs or possible disadvantages when deciding to proceed with a lawsuit, whether against LoanMart or anyone else:

Potential Hidden Costs of Filing a Lawsuit

• Time costs: Whether you win, lose, or settle a court case, one thing is for certain – it will take a good amount of your time to go through the process. You may need to complete heaps of paperwork, participate in phone calls or attend depositions (maybe in person), sign legal documents under the penalty of perjury, and potentially even personally appear in court for trial.
• Emotional costs: Filing a lawsuit can be the start of a period of stress and anxiety as the process by definition is adversarial, with two parties in disagreement about a matter.
• Loss of direct communication about your loan account: If you decide to have a lawyer represent you, LoanMart will not be able to communicate with you directly anymore about your account.  Even the most basic questions about your account will need to go through a lawyer which can end up hurting you.
• No future eligibility for a loan: Many lenders review a previous customer’s account history if the previous customer applies for another loan or line of credit with them. Previous customers whose account had a legal status or other status that’s considered to be a marker of bad account performance from the lender’s perspective, will usually not be approved for another loan or line of credit.   

Potential Risks of Filing A Lawsuit

• Taxes: Even if you win a lawsuit that you’ve filed, your recovery might be cut to size by Uncle Sam. Certain settlements and judgment payments might be considered taxable under the Internal Revenue Code Section 61.
• Disappointment: Besides possibly losing the lawsuit, another potential reason for disappointment can be how little you may end up receiving, even when winning the lawsuit. As previously mentioned, any payout you receive may be taxable. In addition, lawyers typically get paid first out of the pool of money that’s awarded to the winning party. With lawyers charging fees of several hundred, sometimes even more than a thousand dollars per hour, winning a court case could leave some plaintiffs with as little as twenty percent of the recovery amount after lawyer fees and taxes. Is it worth to file a lawsuit for 20 cents on the dollar?
• Increased risk of counter-claim: As mentioned above, lawsuits by definition are adversarial in nature. If you are in breach of your loan agreement by the time you file a lawsuit, doing so may increase your risk of getting counter-sued by the lender or loan servicer for not being in compliance with your contractual obligations of the loan agreement.
• Risk of losing access to your vehicle: If you simply stop making the required payments on your title loan just because you’ve filed a lawsuit, the lender or loan servicer could repossess the vehicle that secures your loan. Besides the inconvenience of losing access to your car or truck, this might result in additional fees, and can potentially negatively impact your credit history and impair your chances of getting approved for future financing.

Alternatives to Filing a Lawsuit

If you are on the fence of filing or joining a lawsuit, it’s good to be aware of the potential alternatives to doing so. Depending on your account age, status and history, you may have access to the following options that could be less stressful than going through the court system when you have a problem with a serviced by LoanMart loan:

• Unwind your loan: If your loan is brand new, you may be able to unwind it by simply returning the funds that you borrowed. Many lenders offer a so-called right to rescind that can be taken advantage of in the early days of a loan.⁴
• Refinance your title loan: If you are not happy with your loan or the customer service, you may be able to refinance your title loan and thus deal with a new lender and different customer service agents in the future.
• Make a complaint: To lodge a complaint about your loan experience, please let us know via compliance@800loanmart.com. We value customer feedback whether good or bad, and all complaints are thoroughly researched and responded to in a timely manner.
• Ask for a supervisor: If you are not happy with the level of service or responsiveness of a particular customer service agent, you may ask to speak with their supervisor.
• Negotiate a resolution: Reach out to LoanMart’s dedicated servicing or compliance staff to see if you can negotiate a solution that can allow you to continue to meet your contractual obligation and avoid the headaches of litigation.  

Final Thoughts on Filing a Title Loan Lawsuit

Whether you live in a highly litigious state like California, or a less litigious one like North Carolina, it’s good to be aware of the potential hidden costs and risks when it comes to lawsuits. Even when winning after a time-consuming legal battle, legal fees and taxes may significantly reduce a payout. Before deciding to file or joining a lawsuit, considering all the alternatives can be worthwhile.