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Does it help your credit if the lender agrees to accept a lesser amount than owed on a repossession balance?


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Wiki User
2015-07-15 21:29:49
2015-07-15 21:29:49

It helps your pocket but NOT your CR. The repo is still there unless you negotiate with the lender to remove it also.


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Actually, it doesn't just come off your record. It will show as a repossession, but it will show as no balance due.

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The allowed amount is the amount that the insurer will pay for particular service. In the context of health insurance, for example, it is the amount that the insurer will pay for each covered procedure. The allowed amount is usually the amount the insurance provider deems the services received to be worth. This amount can also be set by provider contracts with the insurer. These are contracts where, for instance, an insurance company agrees to pay 80% of the standard rate of the provider. In most managed care arrangements, the provider agrees to accept that amount in full payment and not to bill the insured for the balance.

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A creditor will usually accept a lower payoff amount when requested. Usually a lump sum payoff will result in a lower due balance.

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You really don't. Bt you can make an estimate. Take the amount owed on your loan at the time of repossession. Once the car is sold, the lien holder will contact you. See, they're not likely to get the full amount owed by you at the auction, so there'll be a remaining balance. They're going to expect you to pay that back still. They'll tell you what that amount is. So you subtract that amount + repossession and storage fees from the balance you had prior to the repossession, and you'll get a rough idea of what it was sold for at auction.

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That is called voluntary repossession. You will be required to pay the difference in what the lender sells the vehicle for and the balance on the note after that amount is applied to the loan. You did avoid repossession fees by voluntarily turning the car in. Your credit will also show this repossession for 7 years.

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