Information about voluntary vehicle repossession - The Bills.com Blog

I am thinking about letting my car get repossessed because I can not afford the payments..I loss my second job and i just can't afford it--i tried trading it, seeling it and I owe to much on the car..I got screwed and don't know what else to do..

Please keep in mind that once you let your vehicle get repossessed, the lender will dispose the vehicle at an auction and apply the proceeds of the sale towards the outstanding on your loan. If the sale amount is not enough to fulfill the loan obligation, then the lender can still pursue further collection action. Depending on the state law, they might even go to court to sue you. At that point, you just have to present your financial condition to the court. The court will then figure out a payment plan for you. If you do not present yourself at the court, they will get a default judgment against you and may proceed to garnish your wages and other allowable recourses (per your state law). Realistically speaking, you should try to negotiate a one time lump sum settlement and pay it off, if you can. Because they no longer have the asset, the debt is now unsecured.

My car is worth $500 and I owe $5000 I'm in a different state than my lender what might I have to pay if I do voluntarily let them repo my car?

If you opt for a voluntary surrender or if the car is repossessed, you will be liable to pay the entire loan balance plus repossession, handling, storage, and other charges that the lender is entilted to charge according to the agreement. Of course the debt will now be unsecured as the current value of your car will not be able to cover the total due. They might continue their collection efforts and even try to sue you in court.

I had somebody borrow my car without my knowledge and they wrecked it. I contacted my insurance company and they are saying that it isn't covered. There is only a little front end damage to the vehicle, but the vehicle isn't worth much due to the mileage on it. My biggest problem is the fact that it's being considered a "total loss" by the insurance company and they aren't covering it. Should I have it voluntarily repossessed as opposed to paying for the damages and covering the remainder of the loan? I think I should just cover the damages and salvage my credit, but I really don't want to pay that much out of pocket for a vehicle that I still owe payments on.

You're right, it will be better if you pay for the damages to save your credit. I do not know the amount of your repair bills, but if you opt for voluntary repossession, keep in mind that your credit is going to get negative hit which will take a long time for it to recover (records remain on your report for up to 7 years depending on which state you reside in). Will the savings be worth the hit on your credit? This is a question only you can answer.

Hi- I had my vehicle voluntarily repossessed on feb. 23 of this year. they didn't make me sign any forms and they kept on taking the payments out of my account. according to the dealership, the car is gone, and the financial services people want me to sign over my rights to the car because i am still liable. is there any way i can get the car back? do they make payment arrangements so that you can pay off the difference? please respond as soon as possible. thank you.

Once a vehicle is repossessed, it will be difficult to get it back unless you are able to pay the entire amount due, all at once. You can try to negotiate a payment arrangement, but I think you will find them to be inflexible.

Hi-my vehicle was repossesed today because of late fees I had yet to pay on my loan. The loan itself was paid off. When I spoke to my finance company several months ago, they told me that They would hold the title until the late fees were paid off and that my credit would take a hit, but that otherwise they would not repo the vehicle. Now I am kind of stuck because even though they said they would not reposess the car, they did anyway. Do I have aby options here? Any advice would be helpful.

Do you have anything in writing that can prove that they agreed to that arrangement? If not, then I am afraid your options are limited. Try and see if they will release the car upon the payment of the dues, otherwise they will just auction the vehicle and use the sale proceeds to pay the due amounts.

Here is one for the books... 2 weeks ago I bought a car with my now ex boyfriend. We are co owners. I kicked him out a few days later because I found out he was cheating on me. He has taken off with the car and ive never even driven it. I could probably get it back but im weighing options. 1. I keep it and pay it and im on a loan with him for 3 yrs. He can be a jerk and come and pick it up any time he wants to. I would save my credit but have the other hassle. 2. I let it get repossed and my credit suffers but im no longer tied to him on a 3 year loan and he cant do any damage to me any more. Also if I keep it and I get ins wouldnt I have to keep him on ins even if he didnt drive it? It is being financed and we got screwed at 30% interest. Him on my ins at the moment on that car is expensive bcause he has a lot on his record. And no I cant turn it in, cant get one of us off the loan either. Already tried it. Im at a loss as to what to do and need advice. Kim

Hi, What happens 7 yrs after a repossesion has taken place? Can the lender still come after you? My brother signed for a car for me in his name, but when I lost my job and couldn't make the payments, he refused to help pay the car payments...even though the car was in his name and the car was eventually repossesed. Several years later the lender came after him for the payments and garnished his wages. He switched jobs and they left him alone, but have sent an audit to his new employer. It will has been seven years since the repossesion but they are still coming after him for the difference owed on the loan. Is there a point at which the lender can no longer pursue you? Also, I read that if the lender doesn't properly inform you of your rights when they repossess the car, that you don't have to pay them back for the loan. Is this true?

Tough question. There are a lot of moving parts in the situation, so there may not be a best answer. If you turn the car in, you will most probably be issued a deficiency balance. This is the amount you owe less what they sell the car for. The car depreciated the second you drove it off the lot and unless you put down a sizeable down payment, you are underwater on this car. Secondly, even if you co-signed, a 30% interest rate is about the highest rate I have ever seen issued on a car which means your credit is spotty at best. Therefore, the issue of taking a hit on your credit may not be as prevalent as you think. The issue with the insurance on the car is something you need to contact your insurance company about as this detail varies carrier to carrier. Turning the car in will have a direct impact on your credit. As every decision has a negative consequence, it will really come down to weighing the pros and cons relevant to your credit and current status with your ex. Best of Luck.

What you are referring to is known as the Statute of Limitations for a creditor to pursue legal action against you for unpaid debt. But, in your question you state that your brother's wages were garnished at one point. A garnishment can only take place after the creditor has obtained a judgment against the debtor. Once a judgment has passed, the creditor can pursue the fulfillment of the same for up to 10-20 years.

I recently broke up with my boyfriend of seven years, we have a daughter and did live together for 4 of those years. I am concerned now because the car he drives is in my name and he has already with held money for rent and his kid so the car won't be any different. I cannot afford to pay this on top of everything else left behind, is a voluntary repossession an option to save the damage he may do to my credit anyway?

A voluntary surrender is as bad as a repossession as far as credit is concerned.

My step son's girlfriend moved in with us from Texas we live in Pennsylvania. She has a car that she can no longer make payments on up here. Her mother the co signer is demanding that she drive all the way back to Texas to have the car repossessed. My question is can we somehow turn over the car in Pennsylvania rather then Texas?

You will need to speak to the company that financed the vehicle, after all it is still their asset, and if you don't inform them, they will do everything within their means to repossess the vehicle regardless of the location.

I was stupid to get myself in debt when I bought a 2004 Envoy. I live in Texas and I am a single parent. Now with high gasoline prices I can no longer afford the car payment (upside down) and I cannot afford driving the car because of gas price. I already have bad credit because of a 1998 divorce. If i do a voluntarily repo on my vehicle do I have to pay the difference all at once? Will i be able to make monthly payments? Should i file bankruptcy? Help!

How you pay the difference will entirely depend on the kind of repayment terms your lender will agree to. Some of them want all of it at once; some of them are ok with a monthly payment arrangement. I just don’t have enough information about your financial condition to advise you on bankruptcy, therefore I would recommend that you speak to a qualified bankruptcy attorney for that.

I have a car that is worth about 11000 and i owe 20000. i dont want to let it go and my dad has agreed to cosign in a refinancing but will any one refinance that type of a situation where the car is not worth what i owe

I don't think it would be possible to refinance your car. Even if you were able to, you would get financing up to the fair market value of the vehicle. In that case you would still owe money to your previous financier.

I have a friend that is in financial difficulty.She owes more for her pickup than it is worth. She needs to file bankruptcy, but does not have the money to pay for a lawyer. If she just lets the bank come and take it, will she be responsible for the remaining debt. If you know of any free lawyers for the state of South Dakota, will you please advise me, so I can let her know what her options are. Thank you.

Although I do not know of a lawyer in particular (who would be willing to work for free), there are many firms which do provide free consultations. Here is the link to one such firm: http://www.bankruptcylawyersouthdakota.com/. You should do more research online to look for SD specific legal firms to seek consultations from them. If your friend's vehicle gets repossessed, depending on how much she owes, she will still be liable to pay the balance amount. The saving grace here is that the debt would now be termed as "unsecured". The creditor will continue their efforts to collect that money. If what she owes is less than $6000, then she might not have to pay it. Bills.com provides information on collection laws at http://www.bills.com/collection-laws/.

if a vehicle is financed solely under your social security number and you voluntarily turn it in, will the repossession only affect your social security number (credit), or will it affect your and you spouses? even though he/she name is not on the original loan appliction.

I have heard that medical bills dont affect your credit score..........is that true. (non paid medical bills)

If the loan application is only in your name, it will affect only your credit.

Any unpaid bills that are reported to the credit bureaus will affect your credit negatively.

I took out a loan and used one of my vehicles (that is paid for) as collateral. If I did a voluntary surrender would it still be the same thing as if it were being financed?

When you put up your car as collateral, you basically gave the title of the vehicle to the loan financing company. So, yes, it is as good as the vehicle being financed again.

We repossessed a van 7 years ago. They are not threatening to garnish our wages. Can tehy do that? I thought after 7 years it was no longer on our record? WE are already living with 8 children on a very small income....Can they take money away from us that we need to support our children? If they take any money away from us we will end up having to file bankruptcy or file for welfare....not my idea of a good thing.

A debt that old, the statute of limitatiions would come into affect. No company can "just start" to garnish your wages at their wiil, there is a process that needs to followed through the courts and only after the court grants a judgment to the creditor will the creditor be able to pursue garnishments. Don't get intimidated by the collectors. See what the statute of limitations is in your state. You can find this information at http://www.bills.com/collection-laws/. If the statute has passed, you should be safe.

I am the primary account holder on my vehicle. My co-signer is trying to have my vehicle voluntarily repossesed. My payments are current. Can the co-signer do this without my consent or agreement to do so?

That is not possible. The co-signor cannot initiate a voluntary surrender. Moreover, I think the finance company would be careful in this regard because your payments are current.

My elderly mother (80 years old) was persuaded by family members 2 years ago, to co-sign on a new vehicle for a grandson who happens to be a bum. The grandson routinely defaulted on the car payments and the insurance. After a long battle, the grandson finally returned the car to my mother but in damaged condition. Mom wants to voluntarily return the vehicle to the bank because she is unable to pay off the balance of $10,000. If the bank sues my mother, can the bank take or garnish the money that she gets from her small Social Security Check? This is her only means of existence.

Social Security Income is protected from judgment garnishments. Once she gives the car back, she should see what the balance of the loan will be (after a vehicle is repossessed, it is sold in an auction). She can then negotiate a payment plan based on the fact that she has limited income. If she can find an attorney to help her, it will be all the more better.

I live in va. and surrendered a car in 2000.Just received notice of suit to collect debt,plus interest,plus fees in the amount of $6000+.I am unemployed,no auto in my name,only accounts with wife,married in 2005.most of the monies in accounts were hers prior to marriage.What assets can be attached and is there a statute of limitations?

The statute of limitations has long passed for this debt (check on http://www.bills.com/collection-laws/). They can only come after your assets and wages, if they proceed to sue you in court. If they do, and if you can prove that the statute has passed, the court should dismiss the case quite easily.

We are screwed I have lost my clients, my husbands work is slowed way down...he is paid hourly we and make the most from overtime...I have been trying to sell everything we have to sell for nothing almost no takers, we tapped in to our savings, cd's, retirement...all gone now..we have some medical bills that well be coming up expensive!! I owe $11500.00 on my vehicle $300.00 above blue book the lender (our credit union) well only take it down $45.00 .... that does nothing to help...we still pay have to pay full coverage auto insurance too...we have no other ways to get money!! what to do now.

You should have sought for bankruptcy protection before you spent your retirement funds. The money in your retirement account would have been protected from the bankruptcy. You can read more about bankruptcy at http://www.bills.com/bankruptcy/.

i surrender my vehicle recently to the lender and did not sign a release form, they came a retrieved the vehicle at 2.00am.now the lender is calling me to sign the form.What are my options? And I'm I still obligated to the loan?

Yes you are still obligated to fulfill your loan terms. After repossession, your vehicle will be sold at an auction. The sale proceeds from that auction will be applied to the balance on your loan. If the money is not enough to cover the whole loan amount, you are still liable for the balance.

My husband and I filed for bankruptcy a few years ago. After the bankruptcy was discharged my husband talked me into buying a new vehicle. He has now been out of work of a year and a half, so I am the sole provider. We have moved in with my mother so that we can survive, but the vehicle payment that we are trying to make it well above what we can afford. My mother has recently had some income set backs of her own and can't keep paying for all the bills and food. My credit is already horrible, would it make a lot of difference on my credit report if we did a voluntary repo?

I cannot really comment on how much more of a damage a repossession would cause your credit without actually looking at your credit report and score. More than your score, I would be more concerned about the balance that would remain after the repo. The lender can still come after you if there is a balance, with recourses such as wage and bank account garnishment. Take a look at your finances carefully and also talk to your lender for a restructuring of the loan as well.

I have 2 car loans. One of them is extremely upside down and I can't afford 2 car payments. If I repo the car voluntarily or Not, Can they come after my wife's bank account or her wages? Will they accept a settlement before charge off?

That depends if your wife was a co-signor on any of those cars. Another issue that might crop in is if you reside in a community property state, they might construe it as a community property and therefore direct their collection efforts towards your wife. The process of settlement is done through a lot of negotiation, and as such, I cannot predict if they will do it before they charge it off. As far as I know, settlements predominantly happen to debts that have been charged off.

My husband has a vehicle that he is going to voluntarily surrender. The vehicle is in his name only. Will this affect my credit score at all? He made a $10,000 down payment, has been paying on it for about 1 1/2 years, and the car is worth more than what we actually owe. Should we try to explore other options before turning it in? We are 2 months behind on payments.

my wife and i bought a 2008 chrysler 300, it currently has 4500 miles ,we wnat to sell it for at least$21000,so this way we could try to come up with the negative equity of about $10000 because the payments are killing us. when we bought 4 months ago we got suckered in the transaction by the dealer's promises of coming back to refinance, now, the dealer went out of business.Is there any easy way of getting out of this without voluntary repo?,can my strategy realisticaly work?

If the car is worth more than the loan then you should try to sell it and pay the loan off in full. If you live in a community property state (see: www.bills.com/collection-laws ) then you might be liable for the loan and it could impact you. Good luck.

Your options are limited. You can try to sell it at a market price and see if you would recoup the value of the loan (but a car depreciates rapidly, and it is unlikely unless you put quite a bit of equity down). If your dealer made the 'refinance' offer in writing you could sue the dealer or the principals and see if they will take it back, but I suspect that it was a verbal offer. You could consult an attorney about this option. Good luck.

Tina. The vehicle's worth more than he owes?? WHY, OH WHYYYY would he EVER surrender it?? So they can sell it for half of what it's worth and leave him with the difference owed? The answer IS ABSOLUTELY to sell it privately where you can pay off the loan and be scott-free! It might be a bit harder to do in this market, but even a little short and some out of pocket would be better than their auction leaving you screwed by thousands.

Should the tags/lisence plates on my car be removed when I turn it in to the finance company for financial hardship?

Different States have different rules. In some states they stay with the car and in others they belong to the person they were issued to and in others they are returned to the state.

I OWE THREE MONTHS ON MY VEHICLE PAYMENTS, WHENEVER I BECOME CURRENT ( WAITING ON MY TAX RETURN) WILL MY FINANCE COMPANY STILL HAVE THE RIGHTS TO REPOSESS MY VEHICLE KNOWING THAT I AM CURRENT ON MY MONTHLY PAYMENT. PLEASE ADVICE ME.

Unfortunately, once you default on your loan terms, it gives the lender complete rights to repossess the vehicle, even if you pay the past due amount back. You have to realize that once you default, the lender's confidence in your payment capacity will go down. If the loan is relatively new, then you might still be risking repossession, but if the loan is old, you might be able to stave off a repossession if you get current on your payments.

I gave my vehicle back to creditor because I could not afford it, wife became ill and we were no longer a two income family. I receive SSD, Veterans Disability benefits, and a small State employement pension each month. They told me if I paid them 7,000 for a 2007 Chevy Cobalt that they'd just auctioned, they'd forgive the rest. But, they added, most people can't afford to do this, so, they then would expect me to pay a little over 10 k on vehicle ! Is my SSD and VA Disability pension garnishable, and what about my State Retirement check, I'm permanently disable ? And if they could let me get off by my paying them 7 thousand some dollars instead of 10k, why just not charge me the 7k and accept payments ? Doesent make sence to me ?

Sounds like a shady deal, and maybe you have a commissioned 'sales' person driving that decision. You should certainly get in a legal agreement that the debt from the deficiency balance would be forgiven if you buy the $7,000 car. If you do not pay, then you should know that social security, and disability and other forms of fixed income are NOT garnishable so the auto company does not have much recourse other than to scare you... but seek advice from a local attorney to confirm this. Good luck and hang in there.

My car is not running any longer and I am trying to get a new car and I like to send the broke one back will effect my credit bad and wll I still have to pay off the balance, I have a set income and I donot have the money to get it repair and the car dealer that wants to sell me a car want to have it put under thier name what am I to do?

If you still owe money on the broken truck, then returning it will be considered a voluntary surrender, which is as bad as a repossession, so yes, it will effect your credit negatively. If any balance remains, the creditors will try to collect it as well.

I bought a 2005 F150 with my wifes credit when we were married. we have since divorced and now i am 2 payments behind. i have been the one paying for the truck for 2 years and she now is being scared into giving the truck back to the finance company and now i have to give up the 10,000 ive put into it. is there an altenative to giving it back. i will be able to get current with the payments buy the end of the month.is there a way to switch the loan into my name even though i have bad credit and thats why we used her name in the first place.

The only way to get it in your name is to pay off the loan completely and then transfer the title in your name. Once a loan is given out, the lender will not change the title on it until the loan is paid off. You will have to get pre-approved for another loan, and then use that check to payoff the loan in your ex-wife's name. There are many finance companies that will pre-approve you. You should check for some locally. Meanwhile try and get up to date with the monthly payments as soon as possible. You have to realize that this is hurting your ex-wife's credit as well.

I was dooped into co-signing a vehicle with someone (originally thought I was just a reference) in 2005. I was put on the loan as the primary borrower and the co-borrower took the vehicle and I never saw it or drove it. payments were being make ok until last year 02/08 I started to get notices and I called the co-borrower and she said she sold the vehicle to a relative. I tried to contact her relative to try to get the vehicle from them to sell but no calls where returned. She lived in another state. Needless to say the vehicle was recently repossessed and sold. I received a form to file an insurance claim for the repossession due to someone elses fault. Is there such a thing? How should I proceed.

I bought a car in march of 07. Because of my credit the intrest is as much as the car. The car is a 2004 and had 78000 miles.My payments are very high. My freind has a 2006 with only 17000 miles. Same make,model,and better shape than mine. Hes offering to sell it to me for 1/4 of my loan .i could buy this cash. However my son was in a accident which insurance would not cover. it has minor front end damage. I want to do a voluntary repossession. should i have the car fixed first? Also would i be liable for only the amount of the loan or the loan and intrest on that loan?

I would recommend that you consult with an attorney in your state ASAP. Since you signed as a borrower on the auto loan, you are almost certainly liable to the finance company for any deficiency balance remaining after the repossession and sale of the vehicle. If you are forced to pay the debt, you may have grounds to file a lawsuit against the co-borrower and his/her relative to recoup yyour money, as you received little to no benefit from the use of the vehicle, and you were presumably damaged by the co-borrower's failure to meet his obligations under the note. As for your question about insurance, I am not sure what type of insurance policy would cover a cosigner's liability for a deficiency balance on a loan; however, almost anything can be insured, so I cannot say that such a policy does not exist. I would encourage you to investigage this insurance before you file any claim; try to determine the company which underwrites the policy, who took out the policy, and when is was written. Again, I also encourage you to consult with an attorney before you take any action to determine the best course of action to resolve this defaulted loan. I wish you the best of luck!

Voluntary surrender is not a good idea, it looks as bad as a repossession on your credit report. You will also be responsible to payback the entire sum due (principal + interest). Fixing the damage is not going to make a difference.

Question. I am a cosigner on a vehicle. If i give it back to the owner, am i liable for it?

If you are a co-signor, then you have joint responsibility for the loan till it is paid off, meaning, if ever the owner were to default on the payments, the banks could come after you as well.

I currently have a 2007 GMC truck, book value $14,000 and I owe $20,000. Only income I have is as I am 100% disabled is my disability check. If I tell the loaner to come and get the truck I cannot pay for it due to my financial situation, what should I expect to happen?? I own nothing, no assets at all just a bunch of bills.

If you return the vehicle, it will be considered a voluntary repossession. The lender will auction the car and apply the proceeds of the sale to the loan outstanding. As your car is worth less than the loan, there will be a deficiency balance reported on your credit report. The lender can pursue their collection efforts on this debt just like any other unsecured debt. It will show on your report for 7-10 years. But as you state that you are on fixed income with no other assets, the creditor will not have much to pursue the case in court. But be careful as if they do end up going to court and succeed in getting a judgment, depending on the state law, they might be able to garnish your bank account. The onus is on you to prove that your only income is disability.

My ex-husband recently lost his job and therefore, I have lost 1/3 of my income. I had a 2006 Chrysler Town and Country LX minivan that I did a voluntary repossession on this month. I did have a co-signer that could/would not help in any manner. I owed $16700 on the van, but the resale value was only $10,000 at best. The finance company is telling me the van will sell at a dealer auction sometime in the next few weeks/months. The co-signer has told me that he plans on filing bankruptcy so that his wages are not garnished for the balance due. The finance company has told me that they would take me to court and either garnish my wages or place a lien on my home. Is there another way around this. I am willing to pay the difference, but I can not do it in one lump sum like they are telling me I have to. If I was able to do that I would have just paid the monthly payments. Can my co-signer just get off by filing bankruptcy? I am strapped for cash now and can't afford a lawyer to go to court with me, what do I do?

Sheri, what you will have to deal with is a left over deficiency balance after the van is sold. Now, although it is true that they can take you to court over it, it will really depend on the total amount of the deficiency balance. Creditors will always threaten with dire action in the beginning of negotiations, but the fact is that the deficiency balance is unsecured debt (there is no van for collateral). No oen can just go to court and get a judgment overnight, everything has processes that need to be followed and it takes time and money to follow up. I cannot really comment on how the co-signor can protect himself by filing for bankruptcy. I don't think he can just do it because of this one debt. The creditors will follow up with the co-signor without you having to tell them to do so. Just be patient in your negotiations and ask for a payment plan. I see no reason why they will would refuse it.

I purchased a semi truck with a large down payment. The company I was working for went out of business. I can no longer afford to keep the truck. I was thinking of voluntary repo, I have rebuilt the engine at a mere 16,000 dollars and basically replaced everything on the truck. I owe around 32,000.00 and with the way the truck market is right now ,I can't sell it for what I owe . I am on the title for our house, I am the only name on the truck loan. Can they come after my home. NO where to turn, fading fast ,need help. What are your thoughts on how to proceed.

Whether or not your truck lender can come after your home depends a lot on state laws that pertain to lender rights related to deficiency balances on vehicle loans. A deficiency balance arises if sale price of a vehicle cannot cover the total loan outstanding. In some states, lenders can garnish wages and put liens on homes, and in states such as Texas, they pretty much do not have any options. You can check for your state laws here: http://www.bills.com/collection-laws/.

Back in 1994, I purchased a 1994 Chevy Beretta in Florida. I started having problems with the car shortly after purchase. The clutch would break at times while driving. This was very embrassing because the clutch would always break in heavy traffic and would have to be towed. I notify the car dealership and the car was repaired many times but was never fixed. I was aware of the Lemon Law in the State of Florida. I filed my necessary paper work to the Attorney General and I received a response. My sister would write me the check to pay the car payment and I would in return give her the money. Well, all I needed was a payment history from her bank. The banks computer systems back then were not as advanced as they are today. It was a challenge for her to get a copy of all the checks paid toward the car payment. So, I did a voluntary repossesion in 1995 and in 2002 my check was garnished for repayment. After changing jobs, I call the attorney's office to make payment arrangements and I have been doing so since. The last quarter in 2008, things got little hard and I missed 3 payments. I called the end January of this year to informed them that I will be making payments again. On February 3, my bank account that I share with my husband (but only his disability check is deposited in) was garnished for over $1000. I am having to go before the judge to get my husband's money back. I know that they will have to return the money but my question is is there anything I can do to end this nightmare because of the statue of limitations? Do you have any advice that I can present to the judge that will help me possibly win this case?

The Statute of Limitations is not applicable here as you have already been garnished (I am guessing because of a judgment, as they cannot do it without one). It will be best that you keep your accounts separate from your husbands to avoid this situation in the future.

I have a piece of joint property after my divorce. It is a expensive horse trailer. I have made all payments on time for the past 2 years--14 months since the divorce was final. Have tried to refinance but been denied. Wife took me back to court--judge ordered I have 30 days to refinance or they will auction the item off. I cannot sell the trailer for the value of the debt. Bank is unaware of the situation at this time. One person suggested a voluntary repo--but based on the other answers--that is not a good option--but I don't know that a judge forced auction is either--I feel trapped. Any suggestions?

In a voluntary repo, the trailer will be auctioned off and the proceeds of the auction will be applied to the balance of the loan. if the sale amount is not enough to cover the loan then the loan applicant will be held responsible for the "deficiency balance". You state that the trailer is jointly held, if that is the case, your wife will also be responsible for any balance due. You should let the court know about this. Also, try to explain your situation to your current lender to see if they will offer you a loan modification of some sort.

Once I return my vehicle back to the bank, I understand there is a deficiency balance I'm responsible to pay for. I am married and unemployed. The vehicle is only under my name and have no joint accounts with my husband. If there is a judgement/lien placed against me, and I have no assests (checking/savings, homes, etc.) in my name, what will happen next? How and will the deficiency balance become a charge off on my credit? Thanks for your advice- Regards- Kim

A judgment can only be placed against you once the lender (of your auto loan) sues you in court for the deficiency balance and wins the case. Now, if they are successful in getting a judgment against you, what they can do, with respect to getting their money back, really depends on the state laws which differ from state to state. If you have a job, then they might ask for wage garnishments. If you do not have a job, they might ask for your bank account to be garnished. It might also be the case that the lender will not even go to court and will just report the account as past due.

I am a cosigner on a GM vehicle with my mother. Unfortunately, my mother recently had to file bankruptcy. This has in turn put this vehicle, which I never intended to have ownership of, solely in my hands. I already have a home, 2 other vehicles, and a motorcycle that I am responsible for, so I am uncertain as to whether or not I will be able to afford this additional payment. The loan is through GMAC. If GM goes bankrupt how will this affect my loan? Also, the future of my job is uncertain at this point. I was wondering, if I am forced to let this vehicle go back and I have no source of income other than unemployment, can they still garnish that? Since GM is in such dire straits financially, have they really had the ability to pursue these cases? Didn't know if they really wanted to invest money in lawyers to try to collect on cases that may not prove to be fruitful in the end. Thanks so much- SUZY

Suzy, I honestly do not know of any sure way to prevent GMAC from pursuing you for the deficiency balance resulting from the repossession of your mother's vehicle. I assume that the reason the lender required your mother to have a co-signer is that her credit rating was too low to secure the loan on her own; GMAC feared that your mother would default on the loan and therefore they wanted someone with a better credit history (you) to promise to pay if your mother defaulted. Unfortunately for you, the scenario which GMAC was hedging against has come to pass, and you are stuck owing money on a car from which you never received any benefit. You may be able to negotiate a reduced balance settlement or payment plan with the creditor to prevent the creditor from suing you. If the creditor does sue you and obtain a judgment, it should not be able to garnish your unemployment benefits, as they are generally exempt from creditor execution. In a worst case scenario, you may also be able to file for bankruptcy protection to prevent any further creditor action against you. I wish you the best of luck!

My husband and I are separated and in the process of getting a divorce. The car he drives is in my name. He has not made a car payment in 2 months going on 3. The finance company is discussing repossession or delayed payment scheduling. The divorce hearing is two months away. And by then the car would be repossessed. What are my options, that would least damage my credit.

There is no way out here, the preliminary damage has already been done (the delayed payments). If the finance company can provide a delayed payment schedule, that would be much better than a repossession remark on your credit.

My car was repoed and sold at auction. They now want me to pay what my car payment originally was $300 a month on the deficiency of just under $5,000. I cannot make that kind of payment. How much do I have pay monthly in order for them to not be able to come after me legally?

There is no such rule, technically speaking, they can demand all the amount at once. You should negotiate with them to see if they will agree for a lower payment.

I'm on social security and get a pension from my job, if i voluntary repossess my car, can the bank garnish my pension and social security. I'm having a difficult continuing to pay. Th car is worth $6000 to $8000 dollars, so there will be a deficiency.

Fixed retirement income such as Social Security and pensions are usually protected from creditor actions, but a lot will depend on the state laws where you reside. You can get an idea by visiting http://www.bills.com/collection-laws/.

I cosigned on a vehicle with my husband back in 2003. In 2005, the motor blew in it and to avoid damaging our credit, I continued to pay the monthly payments for 2.5 more years until the economy started going downhill and my husband and I both were unemployed. I sent a letter to the bank offering voluntary repossession for the vehicle. They were aware of the motor being blown and opted to NOT repossess it. I received a charge off letter in Sept. 08 and am now being sued for $8000. In Nov. 2008, I was told they would take $3200 as a settlement. I spoke with the atty for the bank today and offered $2000 as paid in full. She told me she would get back with me, but also told me they had filed for garnishment on my bank acct with a bank I've NEVER banked with. Why would they do this? I have 1 bank acct and it's only to cash my paycheck with, I never deposit into it. Once they realize that, will my paycheck be next? I still have the vehicle in my possession, how will the judge see it if the creditor never came after it?? I only have one income & support a family of 4, will the garnishment rate still be at 25% of disposable income if they do garnish my wages?

I have a vehicle that is financed and I have not made a payment for almost 2 years. It shows as a charge off on my credit report. I have not recieved one phone call or letter from the finance Co. in a year and 7 months.The vehicle is still in great condition and I have been driving it all this time. What can I do to get the titale switched into my name. Or do I now call the finance co after all this time and say hey I would like to start making payments again??? Please advise

You need to check whether a judgment was indeed passed against you. Without a judgment, nobody can garnish your bank account or your paycheck. If you are currently in litigation I suggest that you advice your attorney about what exactly happened. It seems like they are using scare tactics to make you pay faster.

I'm afraid to say that without a go ahead from your financing company it will not be possible for you to get the title transferred. You will have to call the finance company and see what they have to say.

I currently lost my job and am now unable to pay for my car note. since the payments are high the only option i have now is a voluntary repo. but my question is if i file for bankruptcy can they still come after me i live in the state of illinois

If you still have a deficiency balance after the repossession then you can include that in the bankruptcy filing. Make sure you speak to a bankruptcy attorney beforehand.

Ok, our vehicle was repoed in February 2004 and then auctioned off April 2004. We were notified of the deficiency balance and offered a payment plan, we paid $110.00 per month until May 25, 2005, when they offered us to pay off 90% of the balance, we jumped at the chance and sent out the check. Well, we received a 1099 form for the remaining $645 for the 2005 tax year which basically had us paying the full amount as this was charged taxes! Well, each time I pull my report it is stating "Charge Off, transferred to recovery," its not showing that we paid the balance and they are actually reporting the amount of $8,726 (which was the amount the vehicle was auctioned for) as charged off! We've disputed the negative report, but the finance company says the information is correct via the credit bureau. I've tried letters to the finance company, faxes, and phone calls (I get transferred around from rep to rep and finally got a number to call, called the number remained on hold for 30 minutes and then tried to leave a voicemail, the mailbox was full!) What should we do? If it helps there are 3 different addresses from this company reporting our repo!

You should have made sure that you had an offer letter in writing which would have specified that they would report the account as paid in full. The item will still report as charge off, but what you have to make sure is that they report the balance as paid in full. You should have documentation of your payment to them and as well as the 1099 you got from them, which proves that they agreed for the settlement. You should write a letter to them explaining the same, and send it via registered post acknowledgement due. If they are not responsive, you could complain to the FTC.

To your comments to my previous admission. We did get a letter from them stating that they would update our credit report, after they received the final payment, but that has yet to happen. I did complain to the FTC and all they could offer was get a lawyer. So for the past 4 years it is still reporting not paid. I am sending out certified letters with proof of recept to all credit bureaus with the documents we have and also sending letters with our documents to each address that the finance company has on our credit report. This has been the biggest mistake in our lives, it haunts us every where we go! My advise to others who are thinking of letting your vehicles go back, just pay what you owe and get caught up, it's not worth it. You still have to pay a balance reguardless!

Can my finance company refuse a voluntary repo? I am trying to give the car back but they said they wont take it and they will start garnishing my wages. Can they do that?

No, they cannot just start to "Garnish" your wages, they would have to get a court ordered judgment before they can start to do that. It is also not right for them to refuse your surrender. Keep in mind that even if you surrender the vehicle, that does not absolve you from the responsibility to pay the entire amount of the loans back. Voluntary or involuntary, even after a repossession, you are still liable to pay any balance that remains after your lender sells your car at the auction.

I just received a call from a collector trying to collect money from an auto repossession from 8 years ago. I told them I wasn't paying, and asked why it is still on my credit report. They said because I live in Texas, they can renew it every 10 years. Your site says the statute of limitations is 4 years. Are they just trying to intimidate me? What are my rights?

I purchased a vehicle through drivetime in dec 2007 and im having a lot of problems with the car that's really beyond my control and im upside down in the car! Is there anyway I can get into something newer?

That will be difficult. Once you buy a car, it really becomes your responsibility and that is the chance that you take.

Jesse - Yes, the statute of limitations in Texas expires in 4 years, but this does not mean that the collector has to stop trying to collect. Most of them still try to collect. But, if it ever gets to court, then the judge will dismiss it based on the statute of limitations. Then again, collection agencies are notorious for changing dates on debt account to reset the statute. I would suggest that you consult with an attorney in your state to see what the status of that account is.

I bought 2 cars 2 1/2 years ago. I am driving one of them and paying $878 a month on it. The other car my friend who lives in a different state then I is driving it and sends me $800 a month for the carpayment even though it is $876 a month. I pay the insurance for both cars which is about another $225 together a month. It's a big problem with my so-called friend living in a differnt state then I because he keeps on getting parking tickets and I become liable for them. Not only that but the car is overdue at least 3 months in registration and he can't get up here to get a smog check and register it. Everything is under my name only. I am able to barely make the payments and I'm thinking about voluntarily turning in at least one of the cars if not both. I am so upside down on both cars that I don't know what to do anymore. I owe about $30k on EACH and each car is maybe worth about $15k. How bad of a ding will this put on my credit and will I end up owing a lot of money? Please help.

The impact will be pretty severe. The repossession will be reported on your credit profile. After the vehicle is repossessed, the lender will auction it off and you will still be responsible to pay the balance of the loan.

I have a leased vehicle which I can no longer afford due to loss of a job. My credit is already ruined do to other debts which have gone unpaid from the same circumstances. I'm not overly a concerned with the voluntary repo affecting my credit, as I will be having to file for bankruptcy and know theit will be next to impossible to be approved for any kind of financing for years to come. My question is that of a financial one, how likely is it that my wages be garnished? Will the bankruptcy dissolve the debt, will they be able to collect even after the bankruptcy, will they be able to file a judgement, etc. In short, other than my credit, and assuming I am approved for bankruptcy, is there any reason in the time following that I would still be liable for the fees/remainder on the lease/etc??

Mike, if you are approved for chapter 7 type of bankruptcy, then you can include any deficiency balance that may arise due to this voluntary repossession. You will need to consult with a bankruptcy attorney, who will be able to see if you qualify for a chapter 7 type of bankruptcy, that is the key.

I co-signed on a car for a relative. We had a distinct verbal agreement that she would maintain insurance and make payments on time. She moved without notice (with the vehicle) after 6 months. Since then she has not made a single payment, nor maintained insurance. I found out and I tried to get the finance company to repossess, and they refused.(I called them on 4 occasions to make this request. On the 4th call the "supervisor" hung up on me because I insisted on repossession and she did not want to do that) It has now been 8 months since a payment has been made. I cannot by any means make those payments, and this "relative" refuses to communicate with me at all. Both names on the title, but of course, I'm primary. I want them to repossess and discuss payment of the difference after sale. I have no standing to repossess myself since I am not the lien holder. How can I "force" them to do this repossession so that I can get this over with?

The finance company wants payments and not the car, and that's why they are dragging their feet on a repossession. Although, it seems odd that they have not repo'd the vehicle after eight months of no payments. You need to speak to an attorney about the precise facts in your case. Your state's repossession rules may be significant. The exact wording of the title may be important, too ("and" vs. "or" between your names), and I don't understand when you write you are "primary." There may be other significant facts you didn't explain that affect your rights. An hour's worth of attorney time isn't cheap, but you are probably facing thousands in car payments and a damaged credit score, so the expense will be well worth it to know your rights and obligations in your situation.

The wording on the title has both names only. There is no "and" there is no "or" - I thought it was strange, but the finance company that I'm referring to has a very, very bad reputation (which I found out later). Looks as if this was done keep their options open as far as who to go after. I say that I'm the "primary" because the dealership verbally informed me that I am. I have since deduced that it means that since I am the one who had any type of credit I am the only one they are interested in collecting from. They refused to even try to call her when I gave them the number. I guess I will need to find a lawyer.

Ellen, please let us know how you resolve your situation.

We have a 2002 PT Cruiser which we found on the internet about 150 miles away. Paid $6600 for it which included new tires. It supposedly only had 57K miles on it. Since the tires were cheap, within a month we had to replace all the valve stems at $45. Several months later, the motor blew up and a strut was bad so there went another $2800. Now it's about nine months later and our transmission went out- will cost $2400 and the other strut is bad to the tune of close to $600. So we will have $12445 stuck into a car worth no more than $5000. In addition, we had to put a lein against our old truck for $3600 to cover loss of income while I was on medical leave. It's worth $1000 at best for private resale. (has 240K miles) We can't afford current payments let alone add the new $2400 + 600 for tranny and strut. Can't afford to keep it, can't afford to give it up. Already filed bankruptcy in '03, have all credit cards paid off and our credit score finally gained about 100 points. We were hoping to refinance our home at a lower rate but not enough equity to borrow extra. At tax time we should have about $4000 coming back. What if anything can we do at that time? Our wish is to get rid of both vehicles and get one very modestly priced car locally. Current vehicle payments total $345 month. We live on SSDI(husband)$1407 and my $700 month net school aide check. Grossly underemployed but no other jobs available in this destitute rural area.

My first reaction is to go to carfax.com and see if the mileage on the odometer is accurate. Modern autos do not have their engines "blow up," the struts go bad, and the transmissions fail at 57,000 miles. If the seller misrepresented the mileage on the car, that's fraud, and gives you the option of a civil action and, if the local DA has time and inclination, a criminal charge, too. If the mileage is legitimate, you might want to consider hanging onto the PT Cruiser because it has a refreshed engine and transmission, new struts, and year-old tires. Why give the buyer the benefit of your repairs, unless you foresee more repairs ahead. If you are cash-flow negative now, you should dump the Cruiser ASAP and understand you may have a deficiency balance on the loan that you need to pay off.

We live in Texas. My husband bought a suburban in the company name and his name. His company is no longer making money. We are no longer able to make the payment we want to give it back. Question is will it effect his credit along with the companys? Can they come after him or just the company? We are upside down and owe more than its worth. We have GAP insurance will that help at all?

It really depends on who the loan is guaranteed by. If the loan and purchase was done in the company's name, then it is their problem. More likely, however, is that the loan was made to your husband -- which means that it will likely negatively impact his credit rating and that they could come after him for collections of any deficiency balance. The first thing you should do is to pull your credit report and check if it is listed on his credit report, and then ask for copies of the loan and purchase docs. Good luck Reshee.

My friend, who lives in Indiana, sold his fairly new car to someone he did not know very well. The agreement was simply worded and signed by them both. The car is still registered in my friend's name and the car payments are being taken directly from my friend's checking account. The man he sold the car to has missed a payment and has turned out to be ir-responsible. My friend heard him tell his wife that he does not plan to pay for the car. He has also said that he was dropping the insurance and plans to wreck the car and total it. My friend wants to repossess the car and sell it even if he take a loss just to get out from under it. He still has a key and plans to take it in a peaceful manner. What must he do to accomplish it legally and what should he do with anything that might be left in the car belonging to this guy? Can he rent a storage unit for any items left inside the car and give the key to the guy. How and when should the police be notified? He does not want to break the law but feels it necessary to get his car back.

Linda, your friend must speak to an attorney in Indiana who is experienced in consumer protection laws. The attorney will review the entire situation including the agreement the two parties signed, and evaluate the statements the buyer made in front of your friend. It may cost your friend several hundred dollars to determine exactly what his rights are and what steps he can take to repossess the car. But that expense will be far, far cheaper than if he attempts to repossess the car in a manner contrary to Indiana law.

Hi, I lost my Job in June 2009 and am currently getting unemployment, As a result of limited funds coming in I could not afford my car loan which I was flawless on for 3 1/2 yrs so I had it voluntarily repossessed a few weeks ago..my question is do you think the Gov't will address any of this issue, seems to me that most of these questions have a lot to do with losing jobs and cant afford the loan they were in. I also read in some of these questions that the finance company didnt come after them for payment and/or garnishes for years after the repo..does that happen a lot? thanks

I don't think there is a large enough special interest group in Washington to encourage Congress to provide a bailout to people facing vehicle repossession. I think the only help automobile buyers will see is the CAR Allowance Rebate System (CARS), aka "Cash for Clunkers." Regarding your question about repossession, I doubt there is any moratorium on collecting deficiency balances. My guess -- note the word choice -- is that with the number of repossessions occurring lately that finance companies are swamped with work and just have not started the collections efforts on everyone.

My father just recently passed away and I would like to take advantage of the Voluntary Vehicle Reposssession on a motor home, in his name only, and a 2008 Suzuki, again, his name only. How will this affect my Mom whose name is not on either vehicle?

There are two issues to consider here regarding each vehicle. First, did your mother sign the loan documents on either the RV or the Suzuki? If she is a co-applicant on either loan document then she has liability for any deficiency balance resulting from the repossession. If she is not a co-applicant or guarantor, then she does not have liability. Second, your mother may or may not be on the titles for both vehicles. If her name is on the titles, then that does not create liability for her regarding the loan. One last point: It is common for collections agents to offer incorrect legal advice to family members following the death of a debtor. Do not believe legal advice from a collections agent.

Bought and have been paying every month for the past 6-1/2 years for a travel trailer. Still owe close to $13K on it. We have been struggling lately to continue making payments and are always late. My husband is semi-retired, my salary has decreased by $1,700.00 this year and we are supporting my daughter again with her car/auto insurance and health insurance payments since she lost her job and has had to move back in with us. We need our house and our cars to we can't let those go. We've managed to cut our other expenses in half, but are still not able to make the payments on this trailer. Our credit score is already ruined because we have been continually late to begin with. We talked with the bank and voluntarily asked them to reposses the trailer (and understood we would be liable for difference if they sold it); however, they came back to us a few weeks later and refused to reposses it. They will ultimately sue us. What would be their next steps? I have a little money in my 401K. Should I take out what I have there just to pay off the loan. Is it worth the penalty and taxes I would have to pay?

Very rarely do I think a person should take an early distribution on their retirement funds to pay-off a debt. If your credit score is already damaged, you have little to lose in pursuing bankruptcy. Bankruptcy will preserve your retirement account, and handle the deficiency balance on the travel trailer repossession and any other debts hanging over you. See the Bills.com Bankruptcy section for more information.

I bought an 03 chevy trailblazer 2 and a half years ago. I pay 390. a month on it and at an original purchase price of sixteen thousand they said that as of today i still owe twelve thousand. I support 7 people on 2400. dollars a month and I cant afford to continue to pay on the vehicle. I want to turn it in or attempt to get rid of the vehicle. Is it possible to have someone to take over payments on the vehicle or am i stuck with it ?

I would be very leery about someone "taking over the payments" on a vehicle, unless that someone was a family member or life-long friend. The risk is great that the person taking possession of the vehicle with the promise of making the payments is an opportunist that will make a payment or two, then stop. The result is that you are missing a vehicle and still liable for the payments. You may want to consider voluntary repossession. Click on the link I just mentioned to learn more about the process.

My car was recently repossessed. I admit I was three payments behind. I made payment in full and brought my account current via a Money Gram but was told that Toyota did not accept Money Gram payments and I should have used Western Union. So, although I had sent out the payments to Toyota totalling over $1800.00, they repossessed my vehicle! In the many phone calls that I made the following day, I was told that in 3-5 days I would receive a letter of my rights...that has never come! I was also told that I would be notified by Toyota when the vehicle would be going to auction. I found out that the vehicle was going to auction tomorrow (11/10) only because the lady with the repo service told me I needed to come get my possessions out of the vehicle. Here's my question: legally, don't they have to inform me of my rights and inform me of the fact that the vehicle is going to auction, in writing? I am not interested in getting the vehicle back, I already have a new car but if they haven't followed the law, there should be some course of action I can take?

The answers to your questions depend on your state law, which you did not provide in your question. I suggest you consult with an attorney in your state experienced in consumer law. The National Association of Consumer Advocates has a list of member-attorneys throughout the US.

My question is I got a new car 2 months ago. I traded in my car which I still owed on. They were having a sale so they had people from Florida down to help, anyway the guy claimed he was the general manager and the only vehicle i could get was a nissan sentra. upon returning several days later I asked a question the dealership informed me I could of anything I wanted. I am very upset I dont want this car its too small, they said they see what they can do which is nothing because now im upside down and twisted, but if I do a voluntary Repo they will see what they can do... what do I do

Under the circumstances you described, I would not consider voluntary repossession as a solution to your problem. If you do go down that path, your credit score will be damaged, which will make it difficult for you to find financing at attractive rates. Regarding what you should do, I suggest the following. Make a household budget and figure out how much you can afford as a car payment. Be realistic. Budgeting is a painful experience for many people, but you need to decide what you can afford. If you can afford -- again be realistic in your budgeting -- a more expensive car then return to the dealership, trade in the Sentra, and buy a bigger car. If you cannot afford more than your current payments, then the sales manager did you favor by convincing you to buy what you did. A Sentra is certainly not the biggest car on the road, but it is not the smallest either, and you must have believed at the time that the car met your needs or you would not have purchased it.

OK please help me with my question. I live in Arkansaas and my husband bought a truck and signed my name to all the documents and I wasn't even there and did not know he was going to do this. His name is nowhere on the paperwork. The payments are 1000.00 a month I tried to make the payments but can no longer afford to do this. I know my credit will be bad if I voluntarily give the vehicle back I just want to know what can they do to me legally I dont want my wages garnished or to be sued for someone else signing my name. He is now my ex-husband because of all of this. Please help.

Take these facts to your divorce attorney and see if Arkansas law will allow a recision of the financing contract under these circumstances. My guess is no given that you did not seek to terminate the contract as soon as you learned of it. You most definitely have a cause of action in fraud against your ex-spouse, which you may want to pursue if only to have a judgment against him in place in case he wins the lottery.

I bought a a truck from a buy here pay here dealership about a year ago. Ive had alot of problems with it and i was tired of fixing it and payin 350 a month. It currently has major eletrical issues thats gonna cost 2300+. So i took the car back to the dealership and did a voluntary repo (i know i know) but thats all i could do! I didnt want to pay 350 a month for something i couldnt even drive anymore and that has been giving me trouble every snce i drove off the lot. Can they sue if its not financed thru a bank? i was current with the payments.... im just confused

A creditor is a creditor, regardless if it is a bank, credit union, department store, car dealer or someone's Aunt Maude. The rights of creditors in your state are the same for all creditors. Read the Bills.com resources All about voluntary repossession and Collections Advice. Then, return here with your questions.

If the financing companies have so much ability to collect a deficiency debt for years to come and you don’t know when they might start to garish your wages, and all you know is that you cant afford to keep your car, and that your credit is screwed know matter what you do, why not part your car out, get what you can and then file bankruptcy.

Creative idea. There may be case law or statutes that make parting-out a financed vehicle illegal (perhaps under a fraud theory), and such activity may result in criminal charges. However, that is speculation on my part, and you would be wise to consult with an attorney in your state who has experience in consumer law before acting on this idea.

Illinois is my state. I co-signed and was co-owner on a vehicle. Other party defaulted with payments. I ended up paying loan off, bank gave me title. other co-owner knew of this and we made verbal agreement she would make payments to me and i would keep title till loan paid. they moved to Mo. and i had to send title there so they could get licenses. I placed lien on title since it was leaving my hand. They sent them the title and now they aren't paying. I am going to take possession of car as soon as i can get there. How do i get title back. Do I play the lienholder card?

I am not an Illinois attorney, and believe you require the advice of one. Consult with an Illinois attorney regarding the steps you need to take to either receive payment or take possession of the vehicle.