Internet's first get-out-of-debt community - 134,000 members

Posted: Sat Apr 14, 2007 11:52 am

my daughters car was repossed when she was ill. Now she is starting to get on her feet when she received a bill for $9,000 for the balance of her loan. She does not have the means to pay or much of a monthly payment. What can we do to negotiate the balance or payment?

Thank you

Posted: Sat Apr 14, 2007 1:17 pm

I will pray that your daughter gets well soon. Do you know if the creditor has auctioned the car and they are collecting on the balance amount?

If the car is already sold, the outstanding balance will be an unsecured debt and you can hire a consolidation company to work out a repayment plan with the creditor. Or, you too can call the creditor and renegotiate for a lower payment plan.

Posted: Sat Apr 14, 2007 1:18 pm

Was she able to get the car back, or did they keep it and take it to auction? If it was auctioned, have they sent a statement of how much it went for? I know that there is a deficiency clause - in case they sold it for less than what your daughter owe.

You might want to look into credit counseling or debt consolidation for your daughter. A good company can negotiate a payment plan with your daughter's car finance company and any other creditors she might have. Or your daughter can attempt to negotiate with the bank herself.

I am in the process of setting up a plan now, and actually had to take my car back from the bank last month (it was repoed). After some persistence I got my car back for just the payments that I owed them plus repo fees and storage, but I will have to make sure I don't have any late payments from now on. They had wanted the balance of the loan to get my car back, but after a week or so of negotiating they were willing to work with me.

Posted: Sat Apr 14, 2007 3:12 pm

$9000 is a large deficiency... was the car in poor condition? The finance company is supposed to give you an accounting of the sale, showing how much the vehicle sold for, and what deficiency balance is owed on the contract. If it is a precomputed contract (Rule of 78ths), they should have also calculated a finance charge rebate upon termination for the remainder of unearned interest.

If the numbers are legit, just like any other creditor, they will naturally want it all right now. Call them and see what type of arrangement can be made on the remaining balance. But don't ignore it, or they will end up sending it to their attorney.

Posted: Sat Apr 14, 2007 3:35 pm

could she file bankrupt on this? If she has no means of paying it and is just getting on her feet, does she have other bills that are behind as well?

mentapause4me. · Posted: Sat Apr 14, 2007 4:10 pm

Thank you all for your comments and information. Her car was repossed in September and she just got the paperwork stating that she has 30 days to pay the total. Her car was not in bad shape.. as a matter of fact she just got the brakes done and new rotors. So she actually improved the vechicle which she bought used. So I will take your advise(s) and call them on Monday and see what I can do.

Again.. thank you so much...

Posted: Sat Apr 14, 2007 5:50 pm

On a used car, that seems way out of league for a deficiency balance. Especially if the car was in decent shape. Most finance companies do not buy paper with with such a high loan to value.

Either 1) the car dealer really got one over on your daughter AND the finance company went along with a deal way over book (A car that books should sell at market within a few K of the loan balance.); or 2) something is wrong with the accounting.

Ask the lender for a detail ledger of the account, showing how they calculated the balance.

Read the contract to see if it has any wording like "add-on interest" or "finance charge rebate" or "sum-of-digits" or "Rule of 78ths". If it does, you are entitled to a credit for unearned interest over the remaining term of the contract. (If it is a simple interest contract, this doesn't apply).

If your daughter purchased any add-on components, like an extended warranty, CLAH insurance or GAP coverage, there should also be a credit for early cancellation of those components.

See how much the car sold for. Was it public or private auction? If it was a private sale bidding, the lender is required to have at least 3 bids and must have sold it to the highest bidder. Ask to see the bids. (If public sale, ask to see the auctioneer's receipt).

The only charges that should be on the account are repo charges and possibly auction expenses, if allowed in your state. I have seen times where the finance company brings the car in for servicing/detailing (to make it sell better), and then tack on those charges to the loan balance --> not legal.

Other than that, just make sure the numbers add up; and question anything that doesn't look right. Good luck to you.

Posted: Sun Apr 15, 2007 3:49 am

giving them a call is probably your wisiest choice, then at least you will know what you are up against.

Connie Kostura · Posted: Wed Oct 22, 2008 6:57 am

Its been 3 years and the bank sold my loan to another bank and now they want payment in full. It was a brand new van in excellent shape they sold the van for less then the blue book value. do I have to pay this bill 10401.38?

Posted: Wed Oct 22, 2008 7:01 am

I believe that you are responsible for the difference between the amount they sold it for versus the value.

Have you spoken to the new bank? Hopefully they'll be able to make payment arrangements with you.

*Name:
*Email:
*Phone:
*Zip:
*Debt

	* denotes required field

Internet's first get-out-of-debt community - 134,000 members

Car repossesion

Members Area

Free Debt Counseling

Ask the community

Featured Discussions

Featured Articles

Question of the Month

Also See

Recent Forum Discussions

Recent Blog Post