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Repossession
Seizure of property bought on credit for which loan payments are not being received. Please note that when asking a car repossession question, it is often useful to include the state that you live in. This will enable people to give you better answers.
11,694 Questions
Which US states allow wage garnishment?
* All US states allow wage garnishment for creditor debt with the exception of Pennsylvania, South Carolina, North Carolina and Texas (depending upon the debtor's circumstances). All US states allow income garnishment for child support, tax arrearages and in some states spousal support (alimony).
If a bank writes off a debt is it still legally collectible?
If it is designated a charge off the debt is still valid and collectible by any means allowed under state law including a lawsuit against the debtor(s).
If the debt is designated as cancelled or forgiven the debt is not collectible. A cancelled debt is considered taxable income, the debtor will receive a 1099-C and the amount stated must be claimed on the person's IRS tax return.
If the creditor writes off interest on the original amount is this taxable?
No as long as you are making payments every month. Most lenders won't reposess a car until you are at least 90 days late. The truth is lenders do not want the car back. Make sure and contact the lender and explaine your situation and they may even work with you to help you get cought up.
If a car is repossessed does the loan still have to be paid off?
Yes.
The car will be sold at a public auction and the borrowers will be responsible for any difference between the selling price and the loan balance plus the allowable repossession and other fees.
The lender is legally required to make a reasonable attempt to get the fair market value of the vehicle, unfortunately this does not always happen and that sometimes leaves the borrowers with a substantial amount of debt to repay.
As soon as the payment is recorded to your account and the lender has agreed to continue the loan ( find that out before you send payment ) its yours again, but I would not expect them to bring it to you, you are going to have to go and get it yourself.
Can your wages be garnished in Virginia for a defaulted car loan made in North Carolina?
Yes. The lender can file a lawsuit in the debtor's state and if awarded a judgment can execute it as a wage garnishment.
you need to call the lien holder or the police they should have a log of all repo's done in the town u are in. Also you will not find out what the car was sold for until after it is said and done. most states you have so many days to get the car back.
Can you get your car back after a repossession?
When you finance or lease a vehicle, your creditor holds important rights on the vehicle until you've made the last loan payment or fully paid off your lease obligation. These rights are established by the signed contract and by state law. If your payments are late or you default on your contract in any way, your creditor may have the right to repossess your car. Talking with Your Creditor
It is easier to try to prevent a vehicle repossession from taking place than to dispute it afterward. Contact your creditor when you realize you'll be late with a payment. Many creditors will work with you if they believe you'll be able to pay soon, even if slightly late. Sometimes you may be able to negotiate a delay in your payment or a revised schedule of payments. If you reach an agreement to modify your original contract, get it in writing to avoid questions later. Still, your creditor may refuse to accept late payments or make other changes in your contract and may demand that you return the car. By voluntarily agreeing to a repossession, you may reduce your creditor's expenses, which you would be responsible for paying. Remember that even if you return the car voluntarily, you're responsible for paying any deficiency on your credit or lease contract, and your creditor still may report the late payments and/or repossession on your credit report. Seizing the Car
In many states, your creditor has legal authority to seize your vehicle as soon as you default on your loan or lease. Because state laws differ, read your contract to find out what constitutes a "default." In most states, failing to make a payment on time or to meet your other contractual responsibilities are considered defaults. In some states, creditors are allowed on your property to seize your car without letting you know in advance. But creditors aren't usually allowed to "breach the peace" in connection with repossession. In some states, removing your car from a closed garage without your permission may constitute a breach of the peace. Creditors who breach the peace in seizing your car may have to pay you if they harm you or your property. A creditor usually can't keep or sell any personal property found inside. State laws also may require your creditor to use reasonable care to prevent others from removing your property from the repossessed car. If you find that your creditor can't account for articles left in your car, talk to an attorney about whether your state offers a right to compensation. Selling the Car
Once your creditor has repossessed your car, they may decide to sell it in either a public or private sale. In some states, your creditor must let you know what will happen to the car. For example, if a creditor chooses to sell the car at public auction, state law may require that the creditor tells you the date of the sale so that you can attend and participate in the bidding. If the vehicle is to be sold privately, you may have a right to know the date it will be sold. In either of these circumstances, you may be entitled to buy back the vehicle by paying the full amount you owe, plus any expenses connected with its repossession (such as storage and preparation for sale). In some states, the law allows you to reinstate your contract by paying the amount you owe, as well as repossession and related expenses (such as attorney fees). If you reclaim your car, you must make your payments on time and meet the terms of your reinstated or renegotiated contract to avoid another repossession. The creditor must sell a repossessed car in a "commercially reasonable manner" - according to standard custom in a particular business or an established market. The sale price might not be the highest possible price - or even what you may consider a good price. But a sale price far below fair market value may indicate that the sale was not commercially reasonable. Paying the Deficiency
A deficiency is any amount you still owe on your contract after your creditor sells the vehicle and applies the amount received to your unpaid obligation. For example, if you owe $2,500 on the car and your creditor sells the car for $1,500, the deficiency is $1,000 plus any other fees you owe under the contract, such as those related to the repossession and early termination of your lease or early payoff of your financing. In most states, a creditor who has followed the proper procedures for repossession and sale is allowed to sue you for a deficiency judgment to collect the remaining amount owed on your credit or lease contract. Depending on your state's law and other factors, if you are sued for a deficiency judgment, you should be notified of the date of the court hearing. This may be your only opportunity to present any legal defense. If your creditor breached the peace when seizing the vehicle or failed to sell the car in a commercially reasonable manner, you may have a legal defense against a deficiency judgment. An attorney will be able to tell you whether you have grounds to contest a deficiency judgment.
When is an auto loan considered to be in default?
At the time any terms of the loan agreement are not met, (late or missed payment, lapse in insurance, etc.).
How long does it take for a car to be repossessed after the request was made to repossess it?
The time frame depends upon the lender. Regardless of whether the repossession is voluntarily done by the borrower or a forced repossession by the lender the consequences remain the same. The borrower will be responsible for any deficiency between the amount that the repossessed vehicle is sold for at public auction and the remaining balance on the loan agreement including added fees and penalties. The respossession will also remain on the borrower's credit report for the required 7 years. Be advised, a lender has no legal obligation to recover the vehicle but can instead file a lawsuit against the borrower for the entire amount of the loan plus legal and other associated costs.
What are the consequences for taking your car back from a dealer after it has been repossessed?
Without proper permission (in writing) to take your car after it's been repossessed, it is considered stealing. Anything from jail time to a hefty fine. If it's been repo'd, it's not yours anymore.
Can your car be repossessed if your payment is less than 30 days delinquent?
Maybe. Once a contract is in default, meaning a payment is late regardless of whether it is a day or a month (unless there is a grace period) the lender may take whatever action deemed necessary. However, some US states require a "Right To Cure" notice be sent to the borrower before repossession action can be implemented.
Is a cosigner liable for an automotive repossession in Michigan?
When you cosign for an automobile purchase you are typically liable for an automobile repossession in Michigan. The reason why is because you are responsible for car payments as a cosigner if the primary debtor cannot pay.
What should you do if you let someone take over payments and they won't return the car?
Report the car as stolen (assuming it is still in your name). You can even tell the police where the car is, most likely. Regardless of who's making payments - the name on the title is the owner of the car. You may wish to get some professional legal advice because this could get ugly.
What are the consequences if a person quits making payments and the car is in your name?
If your name is the borrower name and someone else is making payments and they suddenly stop; then the car will eventually get repoed and it will show on your credit report.
A creditor must take a consumer to court in order to begin the legal process to garnish wages. The exact procedure for this process depends upon state laws. Most statutes require the plaintiff in a court case to make a reasonable effort to contact the defendant. This can entail sending a written notice to a last known address. Thus, it is possible to have a default judgment granted against you without your knowledge.
That would be at the discretion of the lender(s). If an agreement is made and all terms are lived up to, the lender probably will not report the default to CRA's.
How is your balance calculated according the finance charge on owner financing?
Examples of computation methods include the following:
The most common credit card balance calculation method credits your account from the day payment is received by the issuer. To figure the balance due, the issuer totals the beginning balance for each day in the billing period and subtracts any credits made to your account that day. While new purchases may or may not be added, depending on your plan, cash advances typically are included. The resulting daily balances are added for the billing cycle. The total is then divided by the number of days in the billing period to get the "average daily balance."
Usually the most advantageous method for card holders, the balance is determined by subtracting payments or credits received during the current billing period from the amount left at the end of the previous billing period. Purchases made during the billing period aren't included.
Using this method, the cardholder has until the end of the billing cycle to pay a portion of your balance to avoid the interest charges on that amount. Some creditors exclude prior, unpaid finance charges from the previous balance.
The previous balance is the amount you owed at the end of the previous billing period. Payments, credits and new purchases during the current billing period are not included. Some creditors also exclude unpaid finance charges.
Issuers sometimes use various methods to calculate your credit card balance that make use of your last two month's account activity. Read your agreement carefully to find out if your issuer uses this approach and, if so, what specific two-cycle method is used.
If you don't understand how your finance charge is calculated, ask your card issuer. An explanation must also appear on your billing statements.
They can refuse any payment offer that is different than the amount specified in the contract. And don't think of the statement that they will garnish 30% of your wages as a threat. It's a warning, but they will need to sue you and get a court order to do it.
The only way is if you signed an agreement to be responsible for the card. The card agreement was first signed by an officer of the company and then added you as a authorized user. But they can't hold you responsible for any of the debt unless fraud is envolved and then you don't need to worry about the card company you will have much bigger problems.
Can a collection agency garnish your wages if you don't respond to a summons served in CA?
Yes. They can get a writ of judgment and enforce it in the form of wage garnishment. In civil court when a defendent does not answer a summons the plaintiff wins the case by default. Sometimes an appeal can be filed if there is a justifiable reason the defendent could not appear at the hearing.
Can a repossession of a car from 5 years ago be taken to court and possibly garnish your paycheck?
That would depend on the SOL of state the where the person resides. And the laws of that state that pertain to secured property loans.
Most likely.
If you file before the vehicle is sold, the Automatic Stay that gets imposed stops the sale. You can then go back and work on how to pay the arrears. If its a Chapter 13, then they are simply in the plan.
If the car has already been repoed, then make sure you call the bank (or whomever you got the loan through) and tell them you filed. Give them the case # and the chapter.
Will the credit of the co-owner but not cosigner of your car be affected if you file bankruptcy?
No, because the co-signor is not file a bankruptcy with you and the creditor will go after the co-signor instead of you.
Is a voluntary car repossession or bankruptcy worse for your credit?
The most common type of bankruptcy is a Chapter 7, commonly called a 'straight bankruptcy'. You may be allowed to keep a vehicle up to a certain value and reaffirm the loan after the bankruptcy is discharged with the bank to continue payments.
A repo, voluntary or not, will torpedo your credit score (by up to 150 points, at worst) and that damage will weigh heavily for at least 4-5 years before falling off completley in 7 years.
Even after a repo, you are legally responsible for any balance after the bank sells the car at auction. The bank can, and often will, seek a garnishment on your wages to recover this balance. The greater the balance, the more likely they will pursue collection activity. Balances under $2000 are hardly worth the effort to sue you, but some banks do.
You would still need to file Bankruptcy and declare this balance as an outstanding debt. That would wipe out your obligation to repay this amount and prohibit any further activity against you. This will be another major slam on your credit score and the Bankruptcy record will be there for 10 years.
If the car debt is the only reason you would file Bankruptcy, you should hold off until you have no other alternatives. Obviously, if you are talking about repossession, the car payment is more than your budget can handle now- correct? Do you know how much is owed on the car (payoff balance) and if you could possibly sell or trade it in for close to that payoff or more? If so, you need to SELL the car let it get repo'd!
If the loan balance is more than the car is worth (upside-down), then a repo may be the only recourse to get out from under that monthly payment. A VOLUNTARY SURRENDER is always a better idea than allowing the car to be picked up at random by a repo company! It saves the bank from paying the repo company to locate, retrieve, store and deilver the car to them. It also eliminates the chance of any damage during the repo process or while being stored at a repo facility. You would be held responsible for it in the condition it arrives back to the lender. If you deliver it yourself, you can snap a few photos for posterity. Clean out all your belongings, run it thru a car wash and vacuum the interior before handing over the keys. It will make you look like a very mature, responsible and respectful adult even though it will be difficult. It would be easier to just let it disappear one day and not have to face the lender and hand them the keys- probably an embarrassing thing for most of us. But so few people handle it this way that it can only cast you in the best possible light.
I was told a voluntary car repo is worse, because that will be on your credit report as repo. With bankruptcy (Chapter 13) you are making payments.
In terms of credit score, I can answer half of that question. I was at a bankruptcy conference in Indianapolis last year where the speaker had worked for a major credit reporting agency for 20+ years, and he said that bankruptcy normally reduces your credit score by 75 to 150 points. I don't know how much a repo reduces your credit score, but if you can find out, you know what to compare it to. The guy said the credit reporting companies are hush hush about how your credit score is determined, so no credit reporting agency will give you a clear answer to that question, but loan officers might have an idea of what the repo would do to your score based on what they've seen it do to other peoples' scores. In terms of duration, a repo is on your credit report for 7 years, whereas a Chapter 7 bankruptcy is on your credit report for 10 years. A Chapter 13 bankruptcy is on your credit report for 7 years (same as a repo). Also, I'm not sure if credit reporting agencies even distinguish between a voluntary and involuntary repo. Please note that nothing in this posting or in any other posting constitutes legal advice; this is simply my understanding of the facts, which I do not warrant, and I am not suggesting any course of action or inaction to any person.
A debt consolidation lawyer once said you can dispute a bankruptcy or a repossession with the credit bureaus, they have 30 days to verify, if not it must be removed. The best time for disputing these things is around Christmas or other holiday "busy" seasons. "The employees that do verifications for the CRA's are required to do 10 verifications per hour (quota), however they are only paid approx. $7/hr." (Quote taken from a report from a lawyer's research posted at the credit info center.
