Dear Terry,
My daughter needed a dependable car, so my husband and I purchased a new car for her. The loan was in our name, so we had my daughter pay us monthly and we paid the bank. Later, she was unable to make the payments, and so were we. As a result, the loan was several months in default.

Eventually, we received some money and wanted to make the payments to bring them current. However, the bank said it could not work with me because it turned the loan over to a collection agency.

I called the collection agency and it wanted payment in full, which we did not have. We settled on a lower amount, which was a few thousand off what we owed, if we paid in full within a few weeks.

I borrowed the money from my parents and the plan was to sell the car (after I received the title release) to pay the agency back. When we paid the agreed-upon amount, an agency representative told me the agency did not have the title, but would send paperwork to the bank with an explanation that the debt was settled in full. The bank would then send me a title release within 30 days. The collection agency also gave me a letter showing the debt was paid in full.

I never received the title release from the bank, so I called the collection agency. A representative told me to call the bank. The bank told me I still owe the difference of the original amount minus what we paid the collection agency.

The bank has now turned that amount over to the same collection agency and put a different loan reference on this debt attempt. This has also made things more difficult for the collection agency, as it appears to be a new collection attempt when it actually regards the old debt that was already settled. I have spent several hours on the phone talking to the bank and the collection agency and am not getting anywhere, except frustrated.

We do not have the money to pay this and we need the title so we can sell the car and pay my parents back. Due to difficult times, we also have bad credit and cannot get any other loans at this time.

Please advise me, as I really need to get this settled so I can pay my parents back.
-- Jacki

Dear Jacki,
You need to contact an attorney to sort this mess out. Based on what you've said, paying the collection agency, which was acting as the bank's agent, should have settled the debt. But there appears to be something else at work here.

Here are this week's reader questions:

• Car odometer may be robbing your cash • Who can help solve my loan fiasco? • Can I void my wife's car contract? • Will bad credit sabotage my trade-in?

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