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/.