Advice on Full Payment After a Repossession

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Mark Cappel

UpdatedSep 9, 2024

My car was repoed today. They want all the money now. What can I do if I do not have enough money?

My car was repoed today. I had just made a payment online. Owe $1600 + fees. They want all now. What can I do if I do not have enough money?

Thank you for visiting Bills.com, I am sorry to hear about your vehicle being repossessed. Unfortunately, as the asset in their hands now, you will find that most creditors will be unwilling to give the car back to you even if you have made the overdue payments. If you cannot make the payment that they are demanding right now, the lender will usually sell the vehicle at an 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.

Before taking any action regarding this vehicle, I encourage you to consult with a qualified attorney in your area to discuss your state 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.

If you are left owing a deficiency balance after your vehicle is sold by the finance company, you will need to work out a plan to repay the debt; if you fail to do so, the creditor may pursue legal action against you to collect the remaining debt. I encourage you to visit the Bills.com Debt Help Page for ideas on how to resolve any deficiency balance you may face, as well as any other debts you may have.

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.

Best,

Bill

www.Bills.com

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Debt is used to buy a home, pay for bills, buy a car, or pay for a college education. According to the NY Federal Reserve total household debt as of Q1 2024 was $17.69 trillion. Auto loan debt was $1.62 trillion and credit card was $1.12 trillion.

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Collection and delinquency rates vary by state. For example, in North Dakota, 18% have student loan debt. Of those holding student loan debt, 5% are in default. Auto/retail loan delinquency rate is 3%.

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8 Comments

BBill, Feb, 2010

See the Bills.com resource All about voluntary repossession for a discussion of your rights and liabilities in your situation.

kkaz, Feb, 2010

I have paid monthly payment for over three years, but have in the last two years because of the economy unable to pay on due date, but paid each months within ten days of the due date. They constantly call me in my house, cell phone and even at work. I send them certified letter telling that I need to change the payment date; but since they have given me option once two years earlier, they are not willing to give me another date. Recently, I received letter from their collection department with formal demand to pay the full amount. I can't do it as I don't have any savings. I requested in a written letter to show me what I have paid so far and what payments are due for the life of the loan. I have not heard from them. It is a local credit union bank.Please advice. Thanks for your time!

LLeroy, Apr, 2009

Your ability to transfer ownership of a financed vehicle depends entirely on the lender. If the lender is willing to allow the primary debtor to transfer the obligation to the co-signer alone, then there should be no legal obstacle to making the transfer. However, the lender is in no way obligated to allow such a transfer, and may refuse to voluntarily release the primary borrower from his legal obligation to repay the loan. You need to call the lender to explain your situation and ask if it will allow the co-signer to take full responsibility for the loan. If the lender refuses, you can consider alternatives such as refinancing the vehicle in the co-signers name.

PPhyllis Drije, Apr, 2009

If there is a co-signer on a car loan, can owership of the auto be transfered to him/her. Can the present owner then be relieved of payments?

BBill, Nov, 2008

Because you borrowed a certain amount to buy the car and you missed the payments, that is why your car was repossessed. Once you borrow a certain amount, you are responsible to pay it back in full with applicable interest rates.

AAnna, Nov, 2008

If the car has been repossessed, why do I have to pay the balance back?

BBill, Oct, 2008

Most car loan agreements will state that the lender has the right to repossess the vehicle in case of a default. You can try and oppose it, but they have full authority to take possession of the vehicle regardless of what the payment history was on that account. If you contact them now, I am sure that they will want all of the money that is past due to be paid immediately. That being said, you should still contact them and try to work out a payment arrangement with them.

ppoor girl, Oct, 2008

my car is probably 9 months behind in payments, and my car loan is in default. i refused my car to get repossessed. i still have my car. i paid more than half of what i owe in that car. for the first 3 years of owning my car, i paid more than enough each month, and always early. i had really good credit with them, until the economy went down the shit hole and i lost my job. i was jobless for months, but now i found a very stable job, and im an office manager/ nurse. do u think that after 4 months of avoiding contact with the repo/ autloan ppl, u think that they will now try to work with me? i really dont wana lose my car because i paid so much money for it already, and now that im way behind due to my fall back of loosing my job for months, i owe so much more than how ever much i originally owed left. what are the consequences to these? what's my best options? what should i do?