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Advice on Repossessed Vehicle

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Mark Cappel
UpdatedMay 22, 2024

How do I go about asking a company for a detailed statement of charges for a repossessed vehicle?

How do I go about asking a company for a detailed statement of charges for a repossessed vehicle? The truck was a voluntary repo. I owed $18,000.00. There was no notification of auction or selling price. Just received bill for $15,000.00. Just seems a little odd considering the truck is a 2005 Chevy Avalache. I know they did not sell the truck for $3,000.00.

Under Federal law, you have the right to request documentation proving that you actually owe the debt being claimed by a collector. If you have any doubts as to the validity of a debt being asked to pay, you can dispute the debt in writing (this process is also called "requesting validation"). Once you have notified the collection agency of your dispute, it is required to cease all collection activity until it has responded to your request by providing documentary evidence, such as a signed credit agreement, demonstrating that you are the person who is responsible for the debt. Below are three letters which you can use to help you in disputing your debt with a collection agency.

Debt Dispute Letter

- If you receive a call or letter from a collection agency for a debt that you don't think you owe, you can send the agency this letter to put it on notice that you dispute the validity of the debt and that you are demanding that the agency provide proof that you are responsible for paying it. Download Link.

Notice of Insufficient Validation

- Frequently, collectors will respond to a request for validation with nothing more than a computer printout of the balance owed. Generally speaking, this is not sufficient proof of the debt. If you receive a response to the first letter which you think is insufficient, you can use this letter to put the creditor on notice that it has not satisfied its obligations to provide proof of the debt. Download Link.

Failure to Validate Debt

- If you don't receive a response to your debt dispute letter within a reasonable time (usually 30-60 days), or if the creditor continues its collection efforts without validating the debt, you can use this letter to notify the collector that it is legally required to stop its collection activity against you. Having sent the debt dispute, and following up with this letter, may put you in a better position if the creditor refuses to stop its collection efforts and you are forced to file a complaint with the FTC, your state Attorney General's office, or even to file a lawsuit against the collector for violation of the FDCPA. Download Link.

For more do-it-yourself resources please visit Debt Self-Help Center.

Once your car has been repossessed, your creditor will usually sell the vehicle in a public auction or a private sale. In any case, generally your creditor must notify you about what will happen to the car. If your creditor chooses to resell the car at public auction, state law usually requires you to be notified of the date so that if you wish, you can attend and participate in the bidding. If the vehicle is to be sold privately you are usually entitled to a notice of the date after which it will be sold. In any of these circumstances you may be entitled to "redeem" or buyback the vehicle by paying the full amount owed on it plus the expenses connected with its repossession, such as storage and preparation for sale. Some states have consumer protection laws that also allow you to "reinstate" your loan. This means that you can reclaim your car by paying the amount you are behind on your loan together with your creditor's repossession expenses. Check with your state consumer protection office to learn what the laws are in your state.

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. 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."

Dealing with debt

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.

According to data gathered by from a sample of credit reports, about 26% of people in the US have some kind of debt in collections. The median debt in collections is $1,739. Student loans and auto loans are common types of debt. Of people holding student debt, approximately 8% had student loans in collections. The national Auto/Retail debt delinquency rate was 4%.

Collection and delinquency rates vary by state. For example, in Utah, 13% have student loan debt. Of those holding student loan debt, 7% are in default. Auto/retail loan delinquency rate is 2%.

While many households can comfortably pay off their debt, it is clear that many people are struggling with debt. Make sure that you analyze your situation and find the best debt payoff solutions to match your situation.