Repossession: Question for our resident lawyers

ShovelMonkey · 01-12-2006, 06:56 PM

I own a vehicle that I'm considering voluntarily surrendering for reposession. I'm a month behind on the payment already, and hopelessly upside down on the loan.

Now mind, I don't want to do this or see this happen, but if it came to this what's the worst that could happen?

st.cronin · 01-12-2006, 06:56 PM

Quote:

Originally Posted by ShovelMonkey

I own a vehicle that I'm considering voluntarily surrendering for reposession. I'm a month behind on the payment already, and hopelessly upside down on the loan.

Now mind, I don't want to do this or see this happen, but if it came to this what's the worst that could happen?

Your credit rating gets hosed, I think.

Eaglesfan27 · 01-12-2006, 06:57 PM

I'm not a lawyer, but my friend has this happen and it hosed her credit rating, and made it so she had to put a large down payment on the next car she wanted to buy.

duckman · 01-12-2006, 06:57 PM

They'll also sell the vehicle for dirt cheap and stiff you the remaining balance.

ShovelMonkey · 01-12-2006, 07:00 PM

Say I was willing to suffer for the next decade slowly reparing my credit rating...what can they do to me legally?

st.cronin · 01-12-2006, 07:03 PM

Quote:

Originally Posted by ShovelMonkey

Say I was willing to suffer for the next decade slowly reparing my credit rating...what can they do to me legally?

You're better off just calling up whoever has your loan, explaining your situation, and asking their advice. Unless it's a really shady outfit, they'll probably have a solution for you.

AnalBumCover · 01-12-2006, 07:21 PM

stevew · 01-12-2006, 10:13 PM

You'll get really hosed if they repossess it, cause they will sell the car for probably a touch less than wholesale, and then you'll be responsible for the remaining balance minus what they got for it. Then you can be sued for that remaining amount, and it will also fuck up your credit rating.

They can garnish your wages and get a judgement against you. You'll end up paying way more than you owed in that case.

Glengoyne · 01-13-2006, 12:38 AM

Not a good solution. Your best bet would be to attempt to work something out with them. It will fry your credit, and hamper you next time you go to buy a car.

They'll repo it, charge you for that, charge you for storing it, then they'll clean it up, dress it up to prepare it for sale, and add their expenses to your account. Then they'll sell it, probably to a dealer, for a lot less than it can be sold for, and stick you for the balance of your account

Castlerock · 01-13-2006, 08:30 AM

Quote:

Originally Posted by ShovelMonkey

Say I was willing to suffer for the next decade slowly reparing my credit rating...what can they do to me legally?

Be sure you know exactly what trashing your credit rating really means. A good credit rating is SO important. A repossession (and likely writing off of bad debt) is about the worst thing you can do short of bankruptcy.
hxxp://www.investopedia.com/articles/00/091800.asp

Toddiec · 01-13-2006, 08:38 AM

If you can sell it on your own, you are almost guaranteed to get more money out of it than if the bank/financing source resells it. The only problem with that is that the bank/financing source will not release their interest in the vehicle until the full balance has been paid (which is very difficult to do unless you can borrow the difference using another form of collateral from another bank/financing source).

I had a friend who sold his own vehicle when he got behind on payments and then used one of the preapproved credit cards to finance the remaining four grand on the car. The interest rate on the card killed him, but he ended up getting out of it totally in a couple of years without his credit getting killed. His motto was desperate times call for desperate measures.

If you turn it in to the bank/financing company they will sell it using whatever means they usually do (silent bidding process is the way the local bank here does it). If they don't get the total amount of the loan back, they have the option of taking you to court for the rest or just writing it off as a loss. If it is under $500, they will probably write it off, but if not they usually go the legal route. Either way, you credit report then has a voluntary repossession stamped against it for the next decade or so.

Edited to Add:

Also, Glengoyne has a good point. If the inability to pay is going to be a temporary thing (a couple of months or so) then go in and talk to whoever has the loan. They will work with you to create a short term solution to get you through the tough time. You just want to make sure you have a plan for righting the ship, so to speak. The last thing the bank/financing source wants to do is get a car back, so they will work with you if there is even a glimmer of hope on the horizon.

Castlerock · 01-13-2006, 08:40 AM

from myFICO.com:

For a $216,000 30-year, fixed rate mortgage:
If your FICO® score is: Your interest rate is: ...and your monthly payment is:
760 - 850 5.8% $1,268
700 - 759 6.02% $1,298
680 - 699 6.2% $1,323
660 - 679 6.42% $1,353
640 - 659 6.85% $1,415
620 - 639 7.39% $1,494

The difference between the top and the bottom is over $200 a month. Over 30 years of the loan, that comes to over $81,000 in increased costs.

And FICO scores are used more and more everyday. Not just for loans.

01-12-2006, 06:57 PM	#3
Eaglesfan27 Hall Of Famer Join Date: Nov 2002 Location: New Jersey	I'm not a lawyer, but my friend has this happen and it hosed her credit rating, and made it so she had to put a large down payment on the next car she wanted to buy. __________________ Retired GM of the eNFL 2007 Super Bowl Champion Philadelphia Eagles (19-0 record.) GM of the WOOF 2006 Doggie Bowl Champion Atlantic City Gamblers. GM of the IHOF 2019 and 2022 IHOF Bowl Champion Asheville Axemen.

01-12-2006, 07:00 PM	#5
ShovelMonkey H.S. Freshman Team Join Date: Jan 2002 Location: Central PA	Say I was willing to suffer for the next decade slowly reparing my credit rating...what can they do to me legally? __________________ It only hurts for a little while...

01-12-2006, 07:21 PM	#7
AnalBumCover College Starter Join Date: Nov 2002 Location: La Mirada, CA	Need Cash? . __________________ ABC's Game Giveaway list Last edited by AnalBumCover : 01-12-2006 at 07:23 PM.

01-13-2006, 08:38 AM	#11
Toddiec Mascot Join Date: Mar 2002 Location: Kansas City, Kansas	If you can sell it on your own, you are almost guaranteed to get more money out of it than if the bank/financing source resells it. The only problem with that is that the bank/financing source will not release their interest in the vehicle until the full balance has been paid (which is very difficult to do unless you can borrow the difference using another form of collateral from another bank/financing source). I had a friend who sold his own vehicle when he got behind on payments and then used one of the preapproved credit cards to finance the remaining four grand on the car. The interest rate on the card killed him, but he ended up getting out of it totally in a couple of years without his credit getting killed. His motto was desperate times call for desperate measures. If you turn it in to the bank/financing company they will sell it using whatever means they usually do (silent bidding process is the way the local bank here does it). If they don't get the total amount of the loan back, they have the option of taking you to court for the rest or just writing it off as a loss. If it is under $500, they will probably write it off, but if not they usually go the legal route. Either way, you credit report then has a voluntary repossession stamped against it for the next decade or so. Edited to Add: Also, Glengoyne has a good point. If the inability to pay is going to be a temporary thing (a couple of months or so) then go in and talk to whoever has the loan. They will work with you to create a short term solution to get you through the tough time. You just want to make sure you have a plan for righting the ship, so to speak. The last thing the bank/financing source wants to do is get a car back, so they will work with you if there is even a glimmer of hope on the horizon. Last edited by Toddiec : 01-13-2006 at 08:42 AM.

01-12-2006, 10:13 PM	#8
stevew Hall Of Famer Join Date: Dec 2003 Location: the yo'	You'll get really hosed if they repossess it, cause they will sell the car for probably a touch less than wholesale, and then you'll be responsible for the remaining balance minus what they got for it. Then you can be sued for that remaining amount, and it will also fuck up your credit rating. They can garnish your wages and get a judgement against you. You'll end up paying way more than you owed in that case.

01-13-2006, 12:38 AM	#9
Glengoyne Grizzled Veteran Join Date: Sep 2003 Location: Fresno, CA	Not a good solution. Your best bet would be to attempt to work something out with them. It will fry your credit, and hamper you next time you go to buy a car. They'll repo it, charge you for that, charge you for storing it, then they'll clean it up, dress it up to prepare it for sale, and add their expenses to your account. Then they'll sell it, probably to a dealer, for a lot less than it can be sold for, and stick you for the balance of your account

01-13-2006, 08:40 AM	#12
Castlerock High School Varsity Join Date: Jun 2002 Location: Boston, Ma	from myFICO.com: For a $216,000 30-year, fixed rate mortgage: If your FICO® score is: Your interest rate is: ...and your monthly payment is: 760 - 850 5.8% $1,268 700 - 759 6.02% $1,298 680 - 699 6.2% $1,323 660 - 679 6.42% $1,353 640 - 659 6.85% $1,415 620 - 639 7.39% $1,494 The difference between the top and the bottom is over $200 a month. Over 30 years of the loan, that comes to over $81,000 in increased costs. And FICO scores are used more and more everyday. Not just for loans.

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