I got the loan to buy a car,I got the car but now I cant afford to repay the loan,ive not made a single payment on it and Ive ignored letters and when they phone i just hang up.Whats the worst that could happen?
2006-08-27 11:54:32 · 29 answers · asked by candyfloss 5 in Business & Finance ➔ Credit
what if I was to register the car in a family members name,they cant touch it then right?
2006-08-27 12:12:38 · update #1
The issues
Did you take an unsecured loan or was the loan secured on the car
If the loan was secured on the car then you do not own the car. Car loans are normally achieved via lease purchase. Effectively you have sold the car to the bank and the payments are rental on the car. On the last lease payment you repurchase the car for a nominal sum.
If you have a secured loan the bank can repossess the car. (You cannot dispose of the car as the bank owns it). They will then sell it at auction and seek the shortfall after the car proceeds have been set against the costs of repossession and sale and against the loan value.
They will then seek the shortfall via civil debt procedure which will be a county court claim. The county court judgement will be placed on your credit records and make it difficult to impossible to get credit in future.
Should you not pay the county court claim the bank can appoint a bailiff to reposess your good to the value of the loan shortfall. Should you not have sufficient good the bank could then sue you for bankruptcy. As a bankrupt all of your assets will be forfeited to the trustees in bankruptcy. Who will look to recover the loan shortfall on behalf of the bank. They will also be able to garnish any wages you earn for a period of one year.
Debt is a civil issue therefore you cannot go to prison for it.
If the loan is a personal one and not secured on the car then the bank can only take the county court route as detailed above and you are free to sell the car if you wish. However the car proceeds will then form part of your asstes that a baliff or trustee in bankrutcy would seek.
Best bet sell the car repay as much of the loan as you can. Then do a budget working out the minimum regular payment you can afford to pay the bank. Then give a schedule of payments to the bank to repay the shortfall.
The alternative of defaulting will cost you a lot more over your lifetime. It will prevent you from getting a mortgage, credit card or loan in future. Or if credit is given it will be a lot more expensive hence costing you a lot more over your lifetime.
2006-08-27 18:59:29 · answer #1 · answered by Credit Card Write Off 2 · 0⤊ 0⤋
You need to ring the bank and explain. They may advise you to sell the car and repay the loan, or they may be able to work out a reduced payment option for you. Though its unlikely as you havent made any payments at all.
The worst that can happen is that the bank take you to court, the court will order you to repay the debt and you will probably have to sell the car to do that. If you refuse to pay the court, they will send round bailiffs to take anything you own of value to sell off to pay the debt.
And you will have a CCJ (county court judgement) on your record which will pretty much exclude you from getting credit for anything for a long time. So no more loans, credit cards, bank accounts, mortgage etc.
Running away and ignoring creditors is the worst thing to do. Most of the time they will try and help you. Dont be daft, give them a ring and see what they say.
2006-08-27 19:01:39 · answer #2 · answered by lozzielaws 6 · 3⤊ 0⤋
Denyse is absolutely right. Why would you take out a loan you couldn't make the first payment for anyway. You need to put that car to work delivering pizzas at night or something if you want to keep it, You're going to trash your credit and lose the car and putting it in someone else's name is not going to help you, chances are the car is registered to you but is owned by the finance company or bank which is usually the case until you make the last payment.
2006-08-27 20:21:42 · answer #3 · answered by Anonymous · 0⤊ 0⤋
The worst that could happen is...
The bank will persue you for non-payment. Bailiffs may be sent to recover goods to the value of the outstanding debt (bye bye car, tv, stereo and any other thing of value) Your wages may be garnished by the bank, you could get sued, your credit record will have a huge black-mark on it, you will struggle to get credit/loans anywhere else for a loooooooooooong time, you may even be forced to declare yourself bankrupt, which will bring with it a whole bunch of financial headaches.
If i were you i'd call the bank, or loan company and explain to them you are finding it difficult to make the repayments right now, they should be willing work with you to try and sort out something you can afford as far as repayments go.
Sticking your head in the sand like an ostrich is not going to make this go away.
Be a grown-up and face up to the mess you've made for yourself...things could get a whole lot worse if you dont.
2006-08-27 19:11:43 · answer #4 · answered by Sight 4 · 2⤊ 0⤋
How did you get the loan in the first place? Are you working? Hanging up on the creditors and acting like you can run away from this is not going to help. Lets see, you have a car you are not paying for. You have broken the law, and your credit is ruined. Not the best of moves I have ever heard of. The repo man will be coming with a big tow truck to take the car away and you may end up being arrested over this. Sorry if this sounds harsh, but you brought this on yourself. You need to talk to the creditors immediately, and stop hanging up on them. You are making the situation worse by not owning up to what you have done. Good luck, it will take you years and years to fix this mess.
2006-08-27 19:06:22 · answer #5 · answered by Sue F 7 · 2⤊ 0⤋
Your best bet would be to contact the lender and explain your difficulty. If you contact them earlier enough, they are more likely (and willing) to be able to offer you a solution to the problem - depending on what the problem is.
If you're having a temporary difficulty, they might be able to defer your loan payments for a few months, with the interest acruing and being added to the end of the loan.
Alternatively, they may be able to change the term of the loan - again, which results in more interest being charged, but it should reduce your monthly repayments.
Otherwise, you'll have to sell the car, and use your own money to make up any shortfall.
2006-08-28 16:28:46 · answer #6 · answered by nemesis 5 · 0⤊ 0⤋
The car will likely be repossessed and sold to pay off the debt. If you still owe $4000 and the car sells for $3000, you will still owe $1000 and it will appear on your credit report for several years. This will help keep you from going into debt again for a long time because it will be very hard for you to get credit. Of course, there are those who will extend credit then charge you 30% or more, and then you will NEVER get out of debt.
Before it gets hauled away, try to sell it for what you owe then pay your debt which is now more than $4000 because of interest. Then get a second job near home so you can pay off you debts, and stop spending money you do not have.
2006-08-27 19:02:39 · answer #7 · answered by carolewkelly 4 · 3⤊ 0⤋
They break your arms and legs, and then they take your car away. You got this car knowing damn fine well you had no intention of paying for it- what makes you think any business is just going to forget 4K+ interest because you are an idiot??? I hope they nail you to the floor. If you register the car in someone elses name you are committing FRAUD and will go to jail, also you cannot sell the car; it isnt yours. If the bailiffs come and take the car, they will sell it for $1000 and you will still have to pay off the $3000 left, plus the interest. Offer the car back to them- thats all you can do, but dont ignore them or some big hairy guys are going to knock your door down............
2006-08-27 19:14:43 · answer #8 · answered by k0005kat@btinternet.com 4 · 3⤊ 0⤋
Best thing is to speak to them and discuss your situation, they should listen and try to help, as they are obviously interested in you paying it back, rather than just ignoring it.
They will very shortly take legal action against you if you dont, and that could mean some burly guys turning up and taking the car and even stuff around your house.
Why not sell the car and buy a cheap runaround, that will free cash to pay most of it off.
2006-08-27 19:02:23 · answer #9 · answered by AnonyMoose_UK 2 · 2⤊ 0⤋
I've checked some of your other questions and I'll not say "YOU BLOODY IDIOT!!!" as you have other issues going on, but you are in deep trouble. I ended up owing £20,000 when my marriage ended and it took 5 years to sort out. It involved court and bailiffs and lots of grief. Don't ruin your life because of a dumb car. Go to the company and make an offer of payment, even a small one will get them off your back for a while. AND DON'T BORROW MONEY AGAIN!!! If you ain't got it, you can't afford it!!! Trust me, I learned the hard way!
2006-08-27 19:08:51 · answer #10 · answered by Pixxxie 4 · 2⤊ 0⤋