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lola52
Established Member

repo

Hello. My 2003 vw beetle convertible with 104k miles was repossessed. I couldnt afford the payments and i let my bank know that. They said i have until saturday to pay the past due if not it will go to auction. I owe $4000 on it.i cant even afford to pay the past due. Im 20 years old. Should i just let it go to the auction?

How will it affect me in the future? Im a full time student graduating with my bachelors spring 2016.
Message 1 of 10
9 REPLIES 9
StartingOver10
Moderator Emerita

Re: repo

A repossession has both short and long term consequences.  It doesn't matter if it is a voluntary repo or involuntary.

 

If the car is repossed and sold by the lender the small amount that is obtained is applied to your outstanding balance + the late fees, penalty interest rate + repo fees + auction fees and any other fee the lender can think of to add to your balance due.  Then you still owe the rest.

 

The lender can, and many do, get a judgment against you for the balance and it is subject to statutory interest. Judgements last anywhere from 10 years to 20 years depending upon where you are located (which state).

 

A better solution would be for you to redeem the repo and then sell the vehicle so you don't have that large remaining balance.

 

If it isn't possible for you to get the vehicle back, then as soon as you get the notice of sale and the remaining balance - make payments on the amount due to keep a judgment from happening to you. At your age the judgment will really hurt you.

 

Having said that - if you end up with a judgment, then you pay the judgment and get a Satisfaction recorded. However, the judgement amounts are much, much higher than the original debt.

 

In any event, you see that the debt doesn't dissappear. It just becomes larger, and lasts for a much longer time.

It affects your credit report for the 7 years 180 days. But it stays on your public records forever once you have a judgment.

 

 

Message 2 of 10
IamB2
Established Contributor

Re: repo


@lola52 wrote:
Hello. My 2003 vw beetle convertible with 104k miles was repossessed. I couldnt afford the payments and i let my bank know that. They said i have until saturday to pay the past due if not it will go to auction. I owe $4000 on it.i cant even afford to pay the past due. Im 20 years old. Should i just let it go to the auction?

How will it affect me in the future? Im a full time student graduating with my bachelors spring 2016.

I am sorry about the predicament you find yourself in. I understand that the repo very disturbing, and it can, and likely will, have a negative impact on your future credit world - for a while. I know because I've had this happen to me. I paid off the deficiency balance, however, before it turned into a judgment.

 

If you can't afford to get the vehicle back, it is important that you start thinking about how to pay off the defficiency balance. I know this is not the ideal situation - paying a balance on a vehicle which you don't even own anymore - but it is what you will likely have to do. Defficiency balance was explained on the post above and it can be defined as whatever you owe (including all late/repo/auction fees - whatever they can get for the vehicle when it is sold at auction. If this turns into a judgment, it could be much worse.

 

Life does happen to all of us, and it is definitely not the end of the world. It is important however, that we learn from our experiences.

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Message 3 of 10
lola52
Established Member

Re: repo

They told me i could make a payment plan for the remaining balance.
I cant come up with the money on my own.. ive tried selling it on my own but the most ive gotten offered is $1000.
Message 4 of 10
lola52
Established Member

Re: repo

Will it prevent me from getting a home loan or cc in the next couple of years?
Message 5 of 10
StartingOver10
Moderator Emerita

Re: repo


@lola52 wrote:
Will it prevent me from getting a home loan or cc in the next couple of years?

If it is an unpaid judgment - yes it will prevent you from getting a home loan.

If there is no judgment but the balance due is more than $2000, yes it will prevent you from gettng a home loan until it is paid off.

 

It may not affect getting credit cards much, but it will affect getting future auto loans (at least it will affect the rate and the type of lender).

Message 6 of 10
lola52
Established Member

Re: repo

I will pay the balance asap.
What will it show on my report after paid off?
Message 7 of 10
Anonymous
Not applicable

Re: repo

in your situation, I would work a payment plan with the lender, even a small payment as a good faith effort. Meanwhile I would apply for student loan to pay the car off. More then likely you can defer payments while in school, send what ever you can to tpay for the school loan. 

Message 8 of 10
StartingOver10
Moderator Emerita

Re: repo


@Anonymous wrote:

in your situation, I would work a payment plan with the lender, even a small payment as a good faith effort. Meanwhile I would apply for student loan to pay the car off. More then likely you can defer payments while in school, send what ever you can to tpay for the school loan. 


I understand why you suggust a student loan - but student loans are a really bad idea because they are non-dischargeable in Bk and last for your lifetime (depending on the amount).  Why turn a debt that can be handled outside of a student loan into something permanent?

Message 9 of 10
Dj4Money
Established Contributor

Re: repo

 It's pretty simple -

 
 If they are older than three years they carry less weight with lenders. Your APR might be higher than it would be without one, but you can still get a car loan, even if it was recent (Santander/Road Loans). 

 

 Judgements as others have mentioned can be a problem, especially with credit unions.

 

 I owe WFDS $2070, but it would be more expensive for them to pull me into small claims court than to try and collect it, so they charged it off. Somebody said it's marked repossession on my credit report.

 

 I have not see that evidence on any report I have access too. Sounds like BS too me, another reason to play wack-a-mole with salesperson and dealers....

Message 10 of 10
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