Chrysler reportedly bouncing checks to owners of lemon law vehicles

Going through the process of having a troubled vehicle legally branded as a 'lemon' is difficult enough, but now, according to The Los Angeles Times, Chrysler's bankruptcy is making seeking recompense even harder for affected owners in California. According to the daily paper, settlement checks for Chrysler vehicles that have already been agreed upon as defective are apparently bouncing, costing already irked consumers additional time and money.

Apparently, the heart of the issue stems from the fact that financial claims made prior to the company's April 30 Chapter 11 filing can only be paid out if the bankruptcy judge approves the action. To date, Chrysler has apparently not requested the court's permission to make good on these lemon law payments, leaving little recourse for affected consumers.

Many affected owners have apparently spoken with attorneys, who apparently can't do much unless the lemon law payback accounts in question are unfrozen by the bankruptcy court. That means consumers could be out anywhere from a couple of thousand dollars to the entire cost of a new vehicle – one attorney, Alex Simanovsky, is quoted as saying that he has "a stack of six or seven checks in my drawer right now from Chrysler that have bounced" – settlement payments ranging from $2,000 on up to $40,000. Some consumers have already turned-in their defective vehicles to Chrysler, compounding the problem.

For its part, the LA Times says that Chrysler is telling customers with lemon law claims to get in line – by filing a claim with the courts, in effect joining the automakers other unsecured creditors seeking payment. In that scenario, however, defective car owners aren't expected to see much more than "pennies on the dollar."

Consumer groups have reportedly met with auto task force members to discuss the matter, but as of yet, there is no word on any remedy in the works. Thanks for the tip, MopePar!

[Source: The Los Angeles Times]

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