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Auto Loan Charged off and Closed, but still have vehicle

New Visitor

Auto Loan Charged off and Closed, but still have vehicle



I have just recently got back on with my feet with a more stable job after a while from bouncing from place to place. Due to bouncing from place to place, I also fell behind on auto loan for about 8-9 months now. I just recently checked my credit score and it showed the auto loan has been charged off and closed. I want to still continue keeping the vehicle as I need it to get to work everyday and I am unsure what to do. I have read that trying to work something out with the bank might still cause them to allow repossesion of the car. I would also like to try and find a way to get rid of the charged off and bring it back to good standing. Is there any way for me to be able to still keep the car and bring the loan back to good standing? If there isn't maybe I can still sell the vehicle to a family member and have them help me work with the finance? I know since the loan is charged off and no longer in good standing I am limited to what I can do. The lender that was financing the vehicle was TD Auto Finance.


Frequent Contributor

Re: Auto Loan Charged off and Closed, but still have vehicle

Congratulations on getting back on your feet, but you do have some work to do if you want to keep this vehicle...


Only your lender can answer the question of "is it even possible?"

That will depend on many things, and a lot of paperwork.  I can't imagine it will happen at this point without your needing to put up a considerable amount of cash, to catch up your payments and take care of all kinds of fees - late fees, repo fees (if they've put it out for repo), attorney's fees (if they've sent it to their attorney for suit), etc.  Many lenders also charge fees for reinstatement or for modifying your original agreement.


You cannot "sell it to a family member" until you have redeemed it from the lender - you don't own it.  If you had any equity in it at all, that is yours, but the vehicle has a lien on it to the lender, and they get first dibs on any money you might generate selling it, up until the point your balance owed to them is paid.  This is why they would want to repo it - they will take it to auction, deduct the amount they get for it from your total owed, and then decide whether to come after the rest (a "deficiency" suit) or let it go.  If the vehicle is worth more than you currently owe - including all of the aforementioned fees and interest on all of it - then they have to let you have what's left after the auction/sale.


If you have a family member willing to help, their only method is to provide you the money you need to redeem the vehicle (if the lender is willing to let you do so), whether they have it on hand or borrow it from somewhere on their own credit.  You cannot get a secured line of credit using this vehicle as collateral (a "title loan" or anything similar) until you own it with no liens, so that option is out, as is a "refi" since you'll have to qualify for that credit-wise.  You cannot simply assign the car note to another person without the lender being involved.  Your only hope is to get them to agree to let you reinstate, with the costs and paperwork that will go along with that.


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