Debt Consolidation Care Answers
Debt Consolidation Care Answers

 

I have a vehicle that has been threatened with re-possession. what to do?  

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I have a vehicle that has been threatened with re-possession. I am struggling to make payments on this car that is worth less then a third of the amount that I currently owe on it. I am starting to think that re-possession wouldn't be the worst thing ever. If the car were to be repossessed the lender has told me already that they would auction it off and I would still be responsible for paying the difference between the auction price and the remainder of the loan.

If the car is no longer in my possession, but I still owe on the loan, does that then make it an 'un-secure' loan since the collateral is gone? If so, does that mean it qualifies for debt consolidation purposes? Does this sound like a bad way to get myself out of this situation? Any suggestions as to another way to tackle this issue?

Any comments or suggestions are welcome.

Thanks!
 

asked Mar 10, 2005 08:41 AM

csp4rk5

46Answers

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Creditors view secured credit payment history very seriously. Anything like a car or home with late pays or repossession is a very serious mark on your credit report.

As you mentioned, the car can be repossessed, sold at auction for a fraction of what you owe, and then you may be billed for the remainder of the current balance on your auto loan. This is a pretty bad situation, for you are then paying on a car you do not own, have a rotten credit history that will make purchasing another car very difficult, and will still need transportation.

Even if a settlement company would take this on, debt settlement on the remainder of this loan may be much more difficult with potentially less than favorable settlement rates than regular unsecured credit.

My advice? Review your budget thoroughly, cut back on whatever you can, make those payments religiously on time, and even get a second job if you have to pay this off. This will be staying on your credit report for the next 7 years - are you sure what will be happening in your life for the next 7 years?

Will you risk needing a car loan, apt. rental or home purchase that may require a healthy credit score? Many folks think credit scores only affect the ability to get credit, but more and more landlords are hesitant to rent to potential tenants who have demonstrated a lack of good payment history. Some jobs also require that you demonstrate good financial management if you have a fiduciary responsibility as part of your job description.

Evaluate carefully, and good luck on improving your cash flow!

Arise, go forth, and Conquer! (Alfred Lord Tennyson) icon_wink.gif

answered Mar 11, 2005 10:22 PM

Anonymous
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I had files Bankruptcey back in 2001 i just recently lost my job do to a on the job Injury what will happen out of this the vechicle was discharged in the bankruptcey ?

answered Jul 23, 2006 08:32 PM

Anonymous
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I was recenlty repossed

answered Jul 23, 2006 08:33 PM

Anonymous
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It was recently repossed sorry for the bad spelling

answered Jul 23, 2006 08:34 PM

Anonymous
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csp - You would be better off selling the car yourself. You will not get much in their auction and they will take you to court for the balance, perhaps even winning a wage garn on your paycheck.

Its tough spot to be in. I would keep in contact with them and keep begging for extensions. Do whatever you can to get caught up so it does not get to the repo point. Just in case it may not be a bad idea to start parking your car where they can't find it.

answered Jul 23, 2006 11:28 PM

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I had a car repossed and they want to charge me $50.00 to get my personal property back. Is this legal?

answered Aug 14, 2007 05:49 PM

Anonymous
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im going to move,but i am behind on my car payments,the car is owned by a small car lot,what if they cant find the car,and if they do in one year or two years what do they do then?

answered Sep 11, 2007 06:46 PM

Anonymous
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Once they find it they will repo it. The car is owned by the bank that made the loan now not the lot. It would be difficult to hide a car I think for 2 years unless you park it in a garage and never use it. No matter where you go you still need to plate the car and you need a driver’s license. I suppose you could never update that information but you will be forced to if you are ever pulled over for any reason. The longest I have driven with expired plates was 6 months and then I was pulled over for having expired plates (hehe). Expired plates are not a big deal if you get pulled over. To fix the problem you just have to pay the tax and send proof into the DA. I have never had an expired license but I have gone a long time without updating my address when I move. That depends on where you live though. If you move to a new state and get pulled over they will question the fact that your license, plate and proof of insurance do not much via address. If you move across town and never change counties then they can not tell the difference. Officers always ask if the address is correct on your license though so you would have to lie.

Hiding a car will just screw up your credit. You would be better off to either sell it and buy something cheaper or figure out a way to make the payments.

answered Sep 12, 2007 06:23 AM

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Is the car vital for you to have? Can you travel to work with public transportation? I woldnt recommend hiding the veicle or driving around with expired plates etc. That will bring more problems for sure. If the car is nt so important for your lifestyle, sell it yourself and pay off some of your loans!

answered Sep 17, 2007 06:10 PM

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My car was repossed for not paying two months. I was on deployment during those two monthsd and set up an automatic allotmaent from my bank to the vechicle loan bank. Yesterday after five hours on the phone with the vechicle bank I found out that before I left for deployment, the bank representative I spoke to inputted the wrong checking account number and that is why the vechicle had no payments on it. Anyway I made the payments for the two months and the next four months too. There was no notificatiopn on the banks part regarding late payments. They had my email address. Please I need your advice. Am I the only person who sees this as unfair. My car is still not back with me. I spoke to the bank and told them it was not that I did not want to pay the account info that the bank representative inout was wong. They told me to suck it up and thank my stars that I am getting the car back...in two weeks.

answered Oct 4, 2007 08:54 PM

Anonymous
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