I'm sorry, but the fact is that all lenders and banks are like this.
I once missed 3 payments in a row during the last 6 months of a five year car loan (never missed any other payments). OK, not great, my bad (hey, I was broke). The GMAC loan company then set The Machine in action. My car was repossessed as one would expect. However, everything was stacked against me recovering the car: It was sent 100 miles away to be auctioned off, with any amount of the loan not covered to still be owed by me. Yes, they could sell the car for $10, and I'd owe the rest. To get the car back, I needed to pay off the rest of the car loan in full, plus interest, plus penalties, plus "storage" fees (per day - this really pissed me off), the city of Menlo Park charged me with something as well because of the tow, and I had to get myself out to Vacaville somehow and go to the regional distribution center with all the paperwork to get the car.
This happens so infrequently, the people there were shocked when I showed up (I had gotten a loan from a friend, and spent a week on the phone getting it done before they auctioned the car). Standing in the line with all the dealers looking for cheap cars at auction and repo men who just arrived with BMW's they just stole (ahem, recovered) that morning. It was surreal. They had my car in the middle of a sea of other repossessed vehicles parked bumper to bumper. It took them an hour or so just to fish it out. All my possessions in the car had been thrown away.
This doesn't compare to the horror stories from the subprime loan craziness, nor the abuse in the article, but it just shows that when you take a loan, you are at the mercy of the lender, and they are never merciful. They are normally giant corporations who farm out the work to thousands of happy conspirators who make a living from other people's misery, justifying it because the person who took the loan must somehow deserve the treatment.
I had a very similar experience. Cash flow issues during a desperate push to market of a self-financed business. My car was surprise repossessed.
I quickly pulled the cash together (it was on the cusp of a large payment coming to me) to buy it out and pay penalties and encountered a very similar experience to you. I immediately demanded to buy it out to be told I had to wait until they "calculated the amount owing". This simple bit of arithmetic took almost a week, during which they were charging me something to the tune of $200 a day. Finally they gave me the pay out amount so I headed to the fortified bunker where they keep the vehicles -- some gray building in an industrial park surrounded by giant fences -- and an employee saw me so I said I was there to see the guy who told me to come. He walked me into their bullpen and when the guy realized who I was it was like they thought I was going to shoot the place up. It was apparently a major security breach for them, all while I could hear their lines of employees doing what sounded like credit sales calls (I guess they multipurpose).
Every single penalty was grossly beyond any reasonable amount (every player in this scheme wanted their pound of flesh), but I paid it all and got my SUV. Found out later that one of the airbags mysteriously went missing during this period.
They can get away with this because as a society we have a sort of moral attitude about debt. A "they had it comin'" attitude that many people have, until the system turns on them.
Thanks so much for responding and sharing your story! "We have a sort of moral attitude about debt," is spot on! So much so, I was a tentative sharing my experience, afraid I'd get blasted for missing the payments in the first place by people who've never had to deal with the system before. It really was an eye-opening experience for me, and a window into what tens of thousands of people deal with every year.
I forgot to mention I was broke because of my own self-financed startup as well, which didn't work out. (It turns out, I'm a horrible business person. Happily, I was able to sell the assets of the company to a BigCo for a small amount and pay off my debts.)
Lessons for future entrepreneurs in debt: You can ignore the daily credit card robo-calls, make arrangements with your landlord and the electric company, but they'll come for your car faster than you think. (They grabbed mine the day after Christmas).
3 months isn't that fast. Electricity won't go more then 2 usually and landlords often won't go past the last week of the month, unless your renting from a non-corporate landlord.
I have a stretch in the past where my landlord filed on me 4 months out of the year and I pulled together the funds to pay rent + court costs + filing & lawyer fees before the end of the month...
Also had Electricity turned off and that requires paying bill in full + deposit, so usually close to double your bill, or 1.5 times if you owe 2 months. They sure take their time turning it back on too.
(edited to fix formatting)
I once missed 3 payments in a row during the last 6 months of a five year car loan (never missed any other payments). OK, not great, my bad (hey, I was broke). The GMAC loan company then set The Machine in action. My car was repossessed as one would expect. However, everything was stacked against me recovering the car: It was sent 100 miles away to be auctioned off, with any amount of the loan not covered to still be owed by me. Yes, they could sell the car for $10, and I'd owe the rest. To get the car back, I needed to pay off the rest of the car loan in full, plus interest, plus penalties, plus "storage" fees (per day - this really pissed me off), the city of Menlo Park charged me with something as well because of the tow, and I had to get myself out to Vacaville somehow and go to the regional distribution center with all the paperwork to get the car.
This happens so infrequently, the people there were shocked when I showed up (I had gotten a loan from a friend, and spent a week on the phone getting it done before they auctioned the car). Standing in the line with all the dealers looking for cheap cars at auction and repo men who just arrived with BMW's they just stole (ahem, recovered) that morning. It was surreal. They had my car in the middle of a sea of other repossessed vehicles parked bumper to bumper. It took them an hour or so just to fish it out. All my possessions in the car had been thrown away.
This doesn't compare to the horror stories from the subprime loan craziness, nor the abuse in the article, but it just shows that when you take a loan, you are at the mercy of the lender, and they are never merciful. They are normally giant corporations who farm out the work to thousands of happy conspirators who make a living from other people's misery, justifying it because the person who took the loan must somehow deserve the treatment.