Repossessed Car
Repossessed Car
My friend's car was repossessed by the bank. Eventually it was auctioned off
but the "selling price" was lower than the total value of her loan. The bank
was asking her to pay the difference. She doesn't have enough money to pay the
monthly payment let alone pay the difference. What do you think she should do?
- you need to look and see what the fair market value was for the car.
If they sold it for close to that then your friend will have to makeup
the difference.
Most states have laws allowing creditors to get deficiency judgments
when they repossess a car for a default in payments. It's really up to
the creditor to pursue this to judgment. Without a judgment, they
cannot take any or her property or garnish wages.
- Obvsiously she shouldn't be making the regular monthly car payment if
she doesn't own the car anymore, but she might be able to work out a
repayment plan on the deficiency balance for a small amount. She could
ignore the debt and to nothing, but this is never a good idea. If she
is really desparate, she could file a Chapter 7 or 13 bankruptcy.