2007-06-11 00:16:33 · 7 answers · asked by Anonymous in Business & Finance ➔ Credit
Yes and no.
Auto finance is what I do for a living and the process goes like this. First they come and take the vehicle, then they sell it at the auction for far less then it's worth. At that point you are liable for the difference between what you owed and what they sold the vehicle for plus all fees for the repossession, storage, auction, late charges additional interest, court and lawyers.
If you do not pay, they can take you to court and get a judgment. Then they have the legal right to attach bank accounts, garnish your wages (if your State allows it) and file liens on any additional property you may have like vehicles, boats, land and homes.
All of this the collection activity, repossession and judgment will show on your credit for 7-years making it very hard to get any type of loan without a huge down payment, State maximum interest rates and large fees.
2007-06-11 02:37:38 · answer #1 · answered by ? 7 · 1⤊ 0⤋
As the first answer says, you will either be liable for the whole outstanding balance, or in most cases, the remainder of the balance minus whatever amount the lender sells the vehicle at auction for.
However, if you can handle rebuilding your credit rating from scratch, and not being able to take out another loan for about 3 years, and you are not currently or considering becoming the director of a business, you may want to file for bankruptcy.
I filed bankruptcy over a vehicle loan, and was clear of it within one year (small amount of money owing - $6000), and am now once again free to do whatever I wish as far as directing a business. I built up my credit rating by purchasing small ticket items on finance, and now have a clean sheet.
Think about it anyway. It's not for everyone, but it works for some.
Good luck !!
2007-06-11 07:27:52 · answer #2 · answered by martinowens5173 4 · 1⤊ 0⤋
what happened to me is my car got repossessed and they auctioned it off for 500 dollars and i had to pay the rest of the balance of the loan.from now on try to save and pay cash for vehicles.i know its hard but its alot better if u own it u dont have to worry about reposessions. alot less stress i went to a new car dealer ship with 5000 dollars. they wanted 10,000 for a used 99 dodge caravan after some haggling they gave it to me for 5,100 no loans its mine
i was on a bicycle for the longest lol
2007-06-11 07:28:37 · answer #3 · answered by Anonymous · 0⤊ 0⤋
Yes. If the leinholder can sell the car you will have to pay the difference. This is why repossenions usually sell well below book value. the leinholder wants to get what is owed but if they don't they will still try to collect the remainder from you.
2007-06-11 07:22:13 · answer #4 · answered by Charles C 7 · 0⤊ 0⤋
Yes. You signed a contract to repay a certain amount of money.
2007-06-11 15:58:15 · answer #5 · answered by Anonymous · 0⤊ 0⤋
Yep, u singed the contract
2007-06-11 12:00:04 · answer #6 · answered by shorty21 5 · 0⤊ 0⤋
Depends what shape it's in I think.
2007-06-11 07:24:08 · answer #7 · answered by kevrigger 5 · 0⤊ 0⤋