BILL'S ANSWER
First, contact the creditor and tell them your position. Ask if they have a hardship program for people in your situation. Believe it or not, the creditor wants your money and not your car, so they may work with you to reduce your payments until you are employed again.
Let us say for the sake of argument that you can't work something out and the car is repossessed. The creditor will auction off the car. If the selling price is less than the amount owed on your loan, that amount is known as a deficiency balance. According to the California Civil Code 2983.2 it is legal in your state for the creditor to ask you to pay the deficiency balance.
What do you do if there is a deficiency balance? Talk to the creditor and work out a payment plan. They may make intimidating statements that frighten you. Arm yourself with strategies and tactics to level the playing field by understanding debt negotiation techniques. Debt Negotiation and Settlement Advice is a good Bills.com article to get you started.
If you do not work out a payment plan, California does NOT bar creditors from garnishing wages. However, creditors must go to court before doing so. You will be summoned to attend a hearing where the creditor will ask a judge for an order to garnish your income, levy your bank accounts, or put a lien on your property. You will have a chance to argue your side and present financial data showing what you can afford. The judge may or may not consider your information when deciding whether to grant the creditor's request, but at least you made your position known.
You can buy a cheaper car that is exempt. The auto exemption varies by state, and you should check with a California attorney to learn the current amount.
In the meantime, you should educate yourself on free debt help services that may be available to you: Debt Help Services
I hope this information helps you Find. Learn & Save.
Best,
Bill
www.bills.com/
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