I bought a business from someone for $20,000. After paying him everything, yesterday he messaged me, saying that my car is under collateral and he will seize the car if I don’t pay him an extra $5,000. The car is in my dads name. Should I report this to the police? Perhaps I should just leave it because he is asking me for money based on nothing. Is the car safe ?
No, not like this. You may be totally liable for any debt of the business, but seizing things is an official act. Also this is in this case seizing THIRD PARTY collateral as you said the car does not even belong to you.
In this particular case, there is a criminal background. It is called extortion. Report to the police.