Repossession and Balance Due

[Anonymous]

Board,

I have read through previous post and I think I understand the process and the after math.  If your car is repossessed voluntarily or voluntarily, it will show up on your credit as a repo and stay on for 7.5 yrs.  You will beresponsible for the remainder or what is left after the car is sold at an auction.   Is this correct?

I read that your score wont change and the repo wont fall off your credit even if you make payments on the amount, is this true?  What happens if you do not pay on the amount at all, will it fall off   (disappear) along with the repo report on your credit in 7 yrs? 

I am dealing with Capital One Auto Finance and it is looking like I will have a $45K debt after Auction.  They are not willing to negotiate at all and I'm just trying to do whats best for me.  Any suggestions?

Anyone with experiencedealing with Capital One?  Will they try to garnish my wages?  I have nothing in my name and my credit was perfect before the economic downturn.  Do I have a chance to recover?  Im thinking I can survive horrible credit for 7 yrs if I can save paying $45K.  But i dont want to eb hit having to pay it back and still hae horrible credit.  Advice anyone?

I bought the vehicle with thoughts of my new business venture taking off and it failed withthe market?  Can a lawyer help me get this reduced with this story?  I have not had a change of employment since this happened...so any story I go with will be unofficial, so is there any situation besides losing my job that will help?  I recently short sold my house, do you think any court will have mercy?

[MattH]

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@Anonymous wrote:

Board,

I have read through previous post and I think I understand the process and the after math.  If your car is repossessed voluntarily or voluntarily, it will show up on your credit as a repo and stay on for 7.5 yrs.  You will beresponsible for the remainder or what is left after the car is sold at an auction.   Is this correct?

I read that your score wont change and the repo wont fall off your credit even if you make payments on the amount, is this true?  What happens if you do not pay on the amount at all, will it fall off   (disappear) along with the repo report on your credit in 7 yrs? 

I am dealing with Capital One Auto Finance and it is looking like I will have a $45K debt after Auction.  They are not willing to negotiate at all and I'm just trying to do whats best for me.  Any suggestions?

Anyone with experiencedealing with Capital One?  Will they try to garnish my wages?  I have nothing in my name and my credit was perfect before the economic downturn.  Do I have a chance to recover?  Im thinking I can survive horrible credit for 7 yrs if I can save paying $45K.  But i dont want to be hit having to pay it back and still hae horrible credit.  Advice anyone?

I bought the vehicle with thoughts of my new business venture taking off and it failed withthe market?  Can a lawyer help me get this reduced with this story?  I have not had a change of employment since this happened...so any story I go with will be unofficial, so is there any situation besides losing my job that will help?  I recently short sold my house, do you think any court will have mercy?

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First of all, you should talk to a lawyer within 24 hours of reading this posting, I am not a lawyer nor to my knowledge are most of those on this forum.  And even a lawyer cannot give you a good answer without knowing full details of your situation.

If a deficiency is not paid the lender can file suit and go after any other assets the borrower has, including garnishing income.  At all costs try to avoid a judgement by negotiating a settlement with the lender.  It is true that a satisfied judgement is still a judgement and still hurts credit scores very significantly.  A good lawyer may be able to negotiate more effectively than you can with the lender.  However, the lender has to be convinced the deal being offered is better for them than what they would get in court by garnishing wages, which means you will have to convince them you are offering them the totality of what you can offer them.

[Anonymous]

Hi Nupe,

My car was repo'd in 2004 when I was having financial trouble, but I was able to make the payment needed to get it back before it was sold at auction, and then continued the monthly payments to GMAC until it was PIF.  It shows as a repossesion on my credit report (even though it is paid in full and I have the car in my possesion, title and all), and I asked that the CRA's add a note saying it was a redeemed repossesion, which they did. 

Now that I think about it, I may send GMAC a GW letter and see if I can get them to remove the repo notation on my file.  Anyone know if they would be willing to do this or had any success with them?  Never even thought about doing that until just now.

[Anonymous]

Sadly, a lawyer can't help and will cost too much....

Try to settle for less with the loan company directly...........

They can for that amount garnish through a judgement that you can't win.......so your best bet is to be HONEST with the company and come to an agreement of what you can pay back....

[Anonymous]

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@Anonymous wrote:

Sadly, a lawyer can't help and will cost too much....

Try to settle for less with the loan company directly...........

They can for that amount garnish through a judgement that you can't win.......so your best bet is to be HONEST with the company and come to an agreement of what you can pay back....

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True, and for 45k they will come after you.

[Anonymous]

They will come after that $45K, depending on which state your in if they get a judgment againt you they can garnish. I'm supprised no one mention the "B" word. If I was in over $45K in debt no way would I not do "B".

[striders]

This is an interesting. I am ALMOST in the same situation:

I have a car that I purchased last year. Due to the economy downturn, I lost my job and can't keep up with the car payment. I am willing to voluntarily have the bank repossesed the car, sell it at auction and I will pay the remainder in installment.

However, I've been told that the bank will:

1) Put "repo" in the account, even if I do the above

2) NOT willing to do installment. They just come after me for the WHOLE REMAINDER AMOUNT.

So what to do? I don't want to just stop paying the car, but willing to work with the bank. But if the bank don't care, then I might as well too.

FYI, I still have the car and making payments to it.

[MattH]

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@striders wrote:

This is an interesting. I am ALMOST in the same situation:

I have a car that I purchased last year. Due to the economy downturn, I lost my job and can't keep up with the car payment. I am willing to voluntarily have the bank repossesed the car, sell it at auction and I will pay the remainder in installment.

However, I've been told that the bank will:

1) Put "repo" in the account, even if I do the above

2) NOT willing to do installment. They just come after me for the WHOLE REMAINDER AMOUNT.

So what to do? I don't want to just stop paying the car, but willing to work with the bank. But if the bank don't care, then I might as well too.

FYI, I still have the car and making payments to it.

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It sounds like you are between a rock and a hard place and your options are severely limited.  If you cannot find some way to keep making the payments, perhaps by moving in with a relative to cut expenses to the absolute bone, then bankruptcy might be your only option unfortunately.

Good luck, you are not alone in this terrible economy.  Eventually things will turn around for you, and when they do,  be very very careful never again to be upside-down on a car.  If you cannot afford a substantial down payment, then you basically cannot afford a new car, because as you have unfortunately learned the hard way a car can be a financial trap if it cannot be sold for more than is owed.

[striders]

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@MattH wrote:

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It sounds like you are between a rock and a hard place and your options are severely limited.  If you cannot find some way to keep making the payments, perhaps by moving in with a relative to cut expenses to the absolute bone, then bankruptcy might be your only option unfortunately.

Good luck, you are not alone in this terrible economy.  Eventually things will turn around for you, and when they do,  be very very careful never again to be upside-down on a car.  If you cannot afford a substantial down payment, then you basically cannot afford a new car, because as you have unfortunately learned the hard way a car can be a financial trap if it cannot be sold for more than is owed.

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Hi MattH,

Thanks for the advise. I actually got a good deal for the car. I got it for $7K off MSRP with only 7.9% APR. Not the best deal for people with 750+ score but great for people with my credit score (640~).

Problem is, the economy downturn made the car depreciation much faster. It lost $15K in just 1 year, which is double than I expected (I sell car in my past life...).

IN the past, when I sell a car that is still financed, $1-2K is the most I have to pay out of my own pocket.

Back to my problem: so you suggest hanging onto the car? Is this because what I mentioned in my previous post true? i.e. bank will scratch the car as charge off, garnish my wage etc..etc.. even when I am willing to work with them on the remainder amount.

[MattH]

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@striders wrote:

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@MattH wrote:

---

It sounds like you are between a rock and a hard place and your options are severely limited.  If you cannot find some way to keep making the payments, perhaps by moving in with a relative to cut expenses to the absolute bone, then bankruptcy might be your only option unfortunately.

Good luck, you are not alone in this terrible economy.  Eventually things will turn around for you, and when they do,  be very very careful never again to be upside-down on a car.  If you cannot afford a substantial down payment, then you basically cannot afford a new car, because as you have unfortunately learned the hard way a car can be a financial trap if it cannot be sold for more than is owed.

---

Hi MattH,

Thanks for the advise. I actually got a good deal for the car. I got it for $7K off MSRP with only 7.9% APR. Not the best deal for people with 750+ score but great for people with my credit score (640~).

Problem is, the economy downturn made the car depreciation much faster. It lost $15K in just 1 year, which is double than I expected (I sell car in my past life...).

IN the past, when I sell a car that is still financed, $1-2K is the most I have to pay out of my own pocket.

Back to my problem: so you suggest hanging onto the car? Is this because what I mentioned in my previous post true? i.e. bank will scratch the car as charge off, garnish my wage etc..etc.. even when I am willing to work with them on the remainder amount.

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Yes, I suggest hanging onto the car if at all possible because they will do all sorts of ugly things if you default on the loan, these people make Count Dracula seem like a nice guy.  Do check the terms of the loan and see whether there is a prepayment penalty clause; if there is not a prepayment penalty then I would recommend scrimping on all other areas of your budget to pay MORE than the required amount each month and get that loan principal down below the current market value of this car.  Then once you have got the loan down to where you have some equity you can trade the car in for something cheaper and in that way get out from under the loan without incurring judgements, garnishing, etc., etc., all of which would haunt you for years to come.