Car Repossession

[chell]

A friend is having some financial problems and has asked me for some advice. I do not know what to tell her and do not know the answers to her questions. Maybe you guys can answer some questions.

What will happen if she lets them repossess her car? Does she still have to pay it off? Or is there another way she can send the car back and get out of the debt? At this point she does not want to file for bankruptcy. She said that Consumer Credit Counseling can't help with that because it is secured debt.

I do not have a clue where to find these answers. Thanks in advance for your assistance.

 

[Brisully]

I just found this on Google. Not sure of the accuracy though.

Link

 

[goin2disneyagain]

Even is she voluntarily turns the car in it is still considered a repossession and will show up on her credit report that way.

 

[liferiley]

read the small print...in the UK if you go through 1/2 of your payments on a car loan then you can simply tell em to take the car back and they can't take another penny off you....seems more friendly than bankruptsy!do you have a citizens advice department in the USA?

 

[Jasminesmommy]

if they repo the card they will sell it and any leftovers will have to be paid by friend. Will be on Credit report for7 years.Had it happen to us 10 years ago but we actually got money back from the people who sold it because they sold it for more then we owed.

 

[Cinderellafifi]

If the car is repo'd and she elects to take it back, she'll have to pay the fees and costs and overdue payments (of course). If they keep the car, they will sell it - almost always at a loss - and sue her for the difference between what she owes and what they sell it for. She can elect to pay that off - those debts are ALWAYS negotiable at that point - or she can let a judgment enter against her if they sue her for it. If she doesn't have any assets (like a home), she will just have a judgment creditor listed on her credit report (which by that time her credit is ruined anyway). That at least buys her some time so she will not have to file bankruptcy right away.

Financial problems really stink.

 

[Toby'sFriend]

It is a difficult situation.

The first thing she needs to figure out is what the payoff balance on the car is -- and then how much the car is worth.
If the car is worth more than the payoff and is close to repossession, her best bet is to sell the car and then use the proceeds to pay off the loan. If she allows them to reposses the car, they will sell it at auction and likely collect much less than what she can get selling on her own.

If she owes more than the car is worth, things get much trickier. Basically she still needs to sell the car but she also has to get them to agree to release title to the new owner. Sometimes it is possible to get an unsecured loan at a credit union or bank for the remainder of the balance. Sometimes there are other sources of credit available such as a Home Equity loan.

Otherwise, she needs to call whomever holds the note and ask that they allow the sale if she signs a seperate unsecured note. Some places will work with the borrower and some are not as friendly.

 

[Pop Daddy]

I bet "the friend' is you

 

[Stepharoonie!]

They will sell the car, and she will be responsible for whatever the remainder of the bill is. E.g., if she had a $15,000 loan for the car that was still owed, and the car sold for $7,000, she would still owe $8,000 plus the taxes and repossessing fees.

 

[chell]

Sorry to disappoint you Jason, but it's not me.

Thanks everyone for all the information provided. I'll print this out and give it to her this evening.

 

[DisneyAddict_M]

I used to work in collections (and I haven't had a chance to read the other posts). But if her car is repossessed, they'll auction it off and your friend will be responsible for paying off the balance, including any interest it accrues.