If a person gets their car repo'ed, are they responsible for the negative equity if they choose not to keep it

Question

or does it just go as a bad mark on your credit and further banned from any other transaction with the particular financial institution?

Answer 1

Unless you filed bankruptcy before the laws changed, you have to pay the difference between what is owed and what they sold the car for in auction. Under the old law, you can just give up the car and owe nothing else

Either way it's a mark on your credit. As far as getting banned, it depends on the lender

ADD ON:
To the thumbs down folks.....
After my bankruptcy, I received a letter from the car lien holders. In the letter it said I can give up the car and owe nothing or continue payments...I still have the car....and I still have the option...and this is under the OLD laws.

Answer 2

You are responsible for the negative equity. They will pursue collections for the amount. If you don't pay there will be a negative mark on your credit in addition to the information it was repossessed. Many other financial institutions may decide not to extend credit based on that information not just the institution you had the loan with. They can seek judgment to garnish wages, etc. The bad mark will be on your credit report for 7-10 years.

Answer 3

You borrowed a specific amount of money. The car is worth something. If the car is sold off to satisfy the debt and not enough comes in to pay the debt, you are still responsible for the balance. In either case, the repo goes against your credit rating, not just that company.

Answer 4

It goes as a bad mark on your credit, I'm sure they won't want to do business with you for a while and you are responsible for the difference between what you owed and what they auction off the car for.

Answer 5

Old laws, new laws doesn't make a difference.

You bought the car and borrowed the money and promised to pay.

You will owe any money that the sale of the car does not cover. Period