My cousin has got into debt in with his car & the finance co are about to reposess it back..will he still have to pay them for it???
2007-11-16 04:51:06 · 15 answers · asked by Anonymous in Business & Finance ➔ Personal Finance
Yes.
Auto finance is what I do for a living and what will happen is the lender will sell the vehicle at auction for less then it's worth and come after your cousin for the difference plus all fees including, towing, storage, repossession, reconditioning, interest and lawyers, this will amount to several thousand dollars.
When he doe's not pay they will sue and get a judgment from the courts, at that point they can attach bank accounts, garnish wages (if your State allows it) and file liens on any other property he may own like cars, boats, land and homes.
All of this activity will show on his credit for the next 7-years making it very hard to get any other type of loans without making massive down payments, paying huge fees and State maximum interest rates.
He would be much better off to sell the vehicle and take out a loan for the difference.
2007-11-16 05:00:06 · answer #1 · answered by ? 7 · 3⤊ 0⤋
Yes. That amount is known as a "deficency balance".
Not all repossessed autos are sold at auction. Some are acutally sold by the lender, and sometimes will bring decent amounts - much larger than at an auction.
The amount the car sells for is paid toward the balance owed.
Not all states can recover costs associated with repossessing collateral. Kentucky can't for instance. The lender has to eat the cost of the wrecker, any repairs, storage, keys made etc. These cannot be passed on to the customer.
Now - the good news is this - the deficiency balance typically can be negotiated and settled for a lesser amount. I'd start & try to settle for 30 to 40% of the remaining balance. At some point you should reach a mutual amount you can agree on.
More good news - many times you can set that amount up on a repayment plan too. With payment much lower than the original car payment.
The bad news is this - if more than $600 is "forgiven" by the settlement - you may receive a 1099 tax form that you will have to pay taxes on. It is looked at as income.
Good luck.
2007-11-17 13:45:01 · answer #2 · answered by chey_one 3 · 0⤊ 0⤋
Well, you can go on craigslist to see if someone is giving a car away free, or you can put up a listing about your need for a car. You may not want to mention that you just got out of prison (it's up to you, however). You should detail some good things that you will be doing with the car, or that the car will be used to help you find a job, or get you to your job. You can also apply for different sweepstakes, and try winning a car, or do a search for radio contests where someone wins a car for doing the craziest stunt.
2016-05-23 10:12:59 · answer #3 · answered by ? 3 · 0⤊ 0⤋
Yes.
The company will sell the car. But your cousin owes the difference between what the car sold for and what he originally owed on the car.
2007-11-16 04:54:30 · answer #4 · answered by sahel578 5 · 1⤊ 0⤋
the right thing would be to pay what he had already owed on it before they take it, some repo places will auction off the car and try to get the amount left owed on the car and if its less that what is owed they hold the original owner responsible for the remaining difference
2007-11-16 04:55:41 · answer #5 · answered by bshelby2121 6 · 0⤊ 0⤋
Of course he will. They will take the car and sell it auction for what they can get. Meanwhile, they will obtain judgment against your cousin for the difference in what he owes vs what the car brought at the auction sale.
2007-11-16 06:05:52 · answer #6 · answered by acermill 7 · 1⤊ 0⤋
Yes,,,,they will re-sale the car for the most they can get out of it...they will then deduct that amount from the outstanding loan your cousin has with them and the cousin WILL be responsible for paying any remaining balance.
2007-11-16 04:55:23 · answer #7 · answered by carmeliasue 6 · 3⤊ 0⤋
If he wants to save his credit rating, yes he will be responsible for the left over loan balance after they aucion the vehicle. Auctioning the vehicle rarely ever gets the full amount of the loan. If you choose not to pay that balance, then it will greatly affect his creit rating!
2007-11-16 04:56:43 · answer #8 · answered by Phill Lee 4 · 1⤊ 0⤋
After repossession, the car goes up for auction. Whatever they sell it for, they deduct off of the balance of the loan and then that balance is what is due.
2007-11-16 04:54:08 · answer #9 · answered by vixxen 5 · 5⤊ 0⤋
Yes, they sell the car at an auction what ever they get they deduct from your account, you owe the rest
2007-11-16 04:53:57 · answer #10 · answered by Zenkai 6 · 5⤊ 0⤋