What happens after repo? Do you get sued?

[Anonymous]

Friend fired good pay job. Temp job, minimum wage.

*** Has new auto loan, paid 2 of 60 payments ***
$24,000 loan, 90 days late, soon to repo. $500 in CC debt going to collections.

What might the auto lender do after they repo the auto? Get sued?, Judgment?(how much) Best/worst case options? I didn't know how to answer this for my friend. Thank you.

Message Edited by ilovepizza on 07-11-2008 01:54 PM

[Kris1228]

Well i have had 2 repos in my lifetime and 1st time i was young and dumb, SUED!!! 2nd time i escaped it because i always kept them current on my situation, made a payment arrangement and eventually was able to do a settlement and the Charge off status was removed and now paid as agreed, paid acct. I would at least have him call so they can try to pull some strings and hold the account from going into collections, maybe by then your friend can find another job... Im sorry to hear about your friends situation... Also the lady i worked with told me at one point it would have gone into a Judgement status if i would not have satisfied the debt, Loan company was Consumer Portfolio Services....

[Anonymous]

Thank you. My friend is working with the lender but just can't afford it.

Sued = Judgment? My frined owns nothing so there is nothing to take. What will they sue for?

[Anonymous]

Chances are your friend owes more on the car than it's worth, if he bought it new with no or little down payment. Once it's repo'd they will sell it at auction for as much as they can get - most likely not as much as he owes. That money will be deducted from his loan amount, but he'll probably be facing repo fees, auction fees, etc that will be added to his total amount owed. Your friend will be responsible for the difference between his loan amount and fees and the amount they can sell it for at auction. Say he owes 20k. They repo the car & sell it at auction for 15k, and he has 1k in repo fees & such (totally pulling this all out of thin air). 20k + 1k = 21k total owed. 21k - 15k  = 6k your friend is still responsible for paying.

Chances are the loan company will try to make post-repo payment arrangements with your friend for the balance. If that doesn't work out, they'll get a judgment against him for the 6k plus legal fees and it will sit on his credit report, making it very difficult for him to get another car loan for the next couple of years.

[MattH]

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@Anonymous wrote:
Thank you. My friend is working with the lender but just can't afford it.

Sued = Judgment? My frined owns nothing so there is nothing to take. What will they sue for?

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They can sue for a "deficiency judgment" if the total owed plus various costs exceed what they get from selling it, and if the borrower has no current assets they can do things like garnish wages and wreck their credit for years to come.