Information on paying off a balance on voluntary repossession - The Bills.com Blog
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Information on paying off a balance on voluntary repossession
Question: Do I have to sign form that i will pay remaining balance on a voluntary repossession?
Answer: In most cases, you are not legally required to sign any document agreeing to pay the remaining balance of the auto loan after repossession. You may be legally liable for any debt still owed after the vehicle is sold, and the creditor may be able to sue you to obtain a judgmentfor the amount owed; signing a statement admitting to owing the debt will likely only may it easier for the creditor to collect it from you through legal action. Generally speaking, I recommend to consumers who find themselves unable to continue paying their vehicle that they return the car to the bank who financed the loan, or to the dealership which arranged financing, leaving a note explaining that they are unable to make future payments and that they are therefore returning the collateral. Signing a statement obligating you to repay the remaining balance of the note may cause you problems in the future if you find that you need to file bankruptcy or take
other action to resolve this debt.
Before taking any action regarding this vehicle, I encourage you to consult with a qualified attorney in your area to discuss your state?s laws relating to automobile deficiency balances (the amount owed after the repossessed vehicle is sold at auction). Laws vary from state to state regarding how finance companies may collect on deficiency balances, and how much they can collect, so it is important that you discuss your situation with an attorney to make sure that you are not being asked to pay money that you are not legally required to pay.
If you are left owing a deficiency balance after your vehicle is sold
by the finance company, you will need to work out a plan to repay the debt; if you fail to do so, the creditor may pursue legal action against you to collect the remaining debt. I encourage you to visit the Bills.com Debt Help page (http://www.bills.com/debt-help/)/ for ideas on how to resolve any deficiency balance you may face, as well as any other debts you may have.
I wish you the best of luck in resolving the difficulties you are facing with your vehicle, and hope that the information I have provided helps you Find. Learn. Save.
Best,
Bill
www.bills.com
Also, make sure to get a free financial health check-up with Bills IQ!
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1. Posted by Linda L. Bidtah on Tuesday 5th February 2008 03:22
What I read here is what I am going through right now with the truck that I voluntary had the bank take back. They sold it for a cheaper price and the reamaining balance that I have to owe them is 22,659.34 and it was still a brand new truck that I had only for 4 to 5 months. I talked to credit unions and debt companies on what I should do. They all said the same thing that I was ripped off and I just need to pay in anyway that I can. Right now I would like to do a settlement but there is one problem of finding a bank that will help me. I just need help of getting this problem solved of what is the next best step to paying this debt.
2. Posted by Nathan on Tuesday 5th February 2008 10:34
Linda, In order to go through a settlement program you have to be able to afford a fixed monthly payment. How much it will be, will depend on the total amount of debt that you would enroll into the program. What you now owe the bank is reffered to as a 'Deficiency Balance'. These forms of debt do qualify for a settlement program. I would suggest that you contact Freedom Debt Relief for a free consultation, they will give you more details about the debt settlement program. They are a good company and are rated on the Better Business Bureau.