When a vehicle is repossessed, the lender will usually sell the vehicle at auction, then apply the money received at auction to the balance owed on your auto loan. If the lender receives less money at the auction than you still owe on the vehicle, the difference is called a deficiency balance. Generally speaking, you would be liable to the creditor for the deficiency balance, which means you will probably still owe money to the creditor even though you no longer have the vehicle. The creditor may be willing to negotiate a repayment plan or lump-sum settlement with you to repay the deficiency, but if you fail to make arrangements with the creditor, the creditor could sue you to obtain a judgment against you, which could result in wage garnishment, a lien on your property, and/or bank levies, depending on the laws in your state. Thankfully, trucks tend to hold their value better than most other vehicles, meaning that you will probably owe less money as a deficiency balance than many other consumers in your position.
Because deficiency balances on automobile loans can cause a significant financial hardship, you should work diligently to prevent the vehicle from being repossessed, if at all possible. First, you should contact the creditor to discuss options to bring the loan current, such as deferral of the missed payments. If the lender will not work with you in bringing the loan current, you should look into borrowing the money needed to bring the loan current. If you cannot borrow the money to repay your missed payments, or if you cannot afford to continue making your regular monthly payments, you may have no choice but to allow the car to be repossessed. In that case, you should contact an attorney to discuss the laws in your state regarding the collection of deficiency balances, and what options are available to you to resolve the debt. For example, many consumers whose vehicles are repossessed find that filing bankruptcy can help solve their financial problems; I encourage you to visit the Bills.com Bankruptcy Information page at http://www.bills.com/bankruptcy/ to learn more about bankruptcy and the options available to you. In addition, if you are unable to file bankruptcy, a debt resolution program, such as debt settlement, may be able to help you negotiate a settlement with you creditor. To learn more about bankruptcy alternatives, I invite you to visit the Bills.com Debt Help page at http://www.bills.com/debt-help/.
I wish you the best of luck in resolving your financial difficulties, and hope that the information I have provided helps you Find. Learn. Save.