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 judgment for the amount owed; signing a statement admitting to owing the debt will likely only make 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.
Even if you surrender your vehicle to your lender voluntarily, the lender has the legal right to collect on any balance remaining on the debt after the car is sold at auction. This type of debt is referred to as a "deficiency balance." The creditor may even file a lawsuit against you to collect on the unpaid deficiency balance. You should therefore only proceed with a voluntary repossession if you truly cannot afford the loan, as you will likely still owe the lender a significant amount of money, even after you no longer have the use and benefit of the property.
A deficiency balance is an unsecured debt, which the law treats the same as credit card debt, a payday loan, or medical debt, among other consumer debts. To see your rights and options for resolving the deficiency balance, read "Collections Advice."
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.