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Relieve Damage Of An Auto Repossession - The Bills.com Blog
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Relieve Damage Of An Auto Repossession
Tuesday, Jul 21, 2009
Question: I have an upside down car loan. Is there any way to sell the car and settle the deficiency debt? I don't want a repossession to further stain my credit. Seriously, why can't we just cut to the chase and skip the repossession part and get the same result for everyone? I'm desperate to get out of this payment. Any advice?
Answer: Some auto lenders may be willing to allow borrowers to sell their vehicles themselves, though this type of arrangement is the exception in the auto finance industry, not the rule. While it would make sense that lenders would be willing to work with borrowers who wish to sell vehicles they can no longer afford, many lenders are accustomed to repossessing autos and are often not open to alternative possibilities. If you are no longer able to afford your auto loan payment, I would encourage you to contact your lender to discuss your financial difficulties. You may find that your lender will allow you to make arrangements to sell the vehicle yourself and then work with you to repay any portion of your loan not covered by the sale proceeds.Unfortunately, auto lenders are not required to work with delinquent borrowers to mitigate the negative impact of repossession, so I cannot tell you whether or not your
particular lender will be willing to discuss repossession alternatives with you. To learn more about auto loans, I invite you to visit the Bills.com Auto Loans page.
Even if your lender is willing to allow you to sell your vehicle in lieu of repossession, I would be very surprised if the lender does not report the loan as a repossession or voluntary surrender on your credit report. In order to establish a deficiency balance to be repaid, the lender will need to declare the loan in default and will probably need to proceed as if the vehicle were voluntarily surrendered and sold. I encourage you to communicate with the creditor to find out what alternatives, if any, it is willing to offer you to avoid repossession, and how it will report the loan on your credit report after the vehicle is sold.
Unfortunately, I expect that any method you choose to resolve this auto loan,
Even if your lender is willing to allow you to sell your vehicle in lieu of repossession, I would be very surprised if the lender does not report the loan as a repossession or voluntary surrender on your credit report. In order to establish a deficiency balance to be repaid, the lender will need to declare the loan in default and will probably need to proceed as if the vehicle were voluntarily surrendered and sold. I encourage you to communicate with the creditor to find out what alternatives, if any, it is willing to offer you to avoid repossession, and how it will report the loan on your credit report after the vehicle is sold.
Unfortunately, I expect that any method you choose to resolve this auto loan,
other than continuing making your regular payments, will negatively affect your credit. Even if the lender allows you to sell the vehicle, the loan will probably be in default, and the lender may report additional derogatory information on your credit reports. You will likely owe a significant deficiency balance (the amount of the loan minus the sale proceeds), which you will need to repay or otherwise resolve with the lender. However, selling the vehicle yourself could save you a significant amount of money in legal costs, repo fees, etc. As I said, the key thing is that you communicate with the lender about your situation so you know what options are available to you.
I wish you the best of luck in resolving the problems you are facing with this auto loan, and hope that the information I have provided helps you Find. Learn. Save.
Best,
Bill
www.bills.com
I wish you the best of luck in resolving the problems you are facing with this auto loan, and hope that the information I have provided helps you Find. Learn. Save.
Best,
Bill
www.bills.com
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