Americredit Voluntary repo?

You had a certain amount financed that Americredit expects to be paid back under your contract. If you volunarily give up the car they will sell it and you are responsible for the difference plus any costs. They wont go out of there way to sell it for the best price either. Plus you are stuck with a repo on your credit report.

You would owe whatever amount would be left after the creditor sold the car. For example if they sold the car and you have 4,000 left over on the balance after the sale.. you owe the 4,000. That works for any type of repo.

Thanks for the responses. My husband had heard that in Illinois if we had paid most of the loan that we would not be responsible for the rest. Looks like he was wrong.

Actually your husband heard correctly. This is specific to IL and I'm not sure of any other states that do this...

Under IL laws (specifically, the Retail Installment Sales Act), if you had paid at least 60% of the loan prior to surrendering the vehicle, then the lender has two options:

1) They can keep the car and sell it. In that case, they must relieve you of further obligations under the contract, and they CANNOT sue you for a deficiency balance.

-or-

2) They can give the car back to you and then try to collect any remaining balance owed, which could include a lawsuit.

It is up to the lender to decide which action they take, and they will weigh in their equity position in the vehicle to make that determination. Albeit, either way you would have a repossession on your credit report, which will last for 7 years.

To calculate whether you've paid at least 60%, you cannot use the selling price of the vehicle. You have to compare your total payments made against the deferred cost (total of payments listed on the contract). For example if you had a 60 month contract X $268/month, then your deferred price is $16080. If you paid 10,988 (you can't count late charges or other fees you might have paid), then 10988/16080 = 68.3%.

**Notice that the law I quoted below states "...at the request of the holder...". I'm not sure what legal ramifications this has if you give the vehicle back without them asking for it first. If you arbitrarily give the car back without them requesting you to, then these laws might not apply.

[quote=815 ILCS 405/26]If the buyer has paid an amount equal to 60% or more of the deferred payment price at the time of his default under the contract and if the buyer, at the request of the holder and without legal proceedings, surrenders the goods to the holder in ordinary condition and free from malicious damage, the holder must, within a period of 5 days from the date of receipt of the goods at his place of business, elect either (a) to retain the goods and release the buyer from further obligation under the contract, or (b) to return the goods to the buyer at the holder's expense and be limited to an action to recover the balance of the indebtedness. [/quote]

Thank you Debtcruncher! I will have my husband read this when he gets home from work.

Quote:

I understand what you are saying ChrysHenderson. This is something we will have to really think about before doing it if we even do it at all.

You are so close to paying it off...only 18 more months...if you are having difficulty making the $268 a month payments, see if the lender will refi the loan...otherwise, if you don't want the car anymore, see if you can sell it - at least for the balance of the loan, that way you save your credit rating and pay off the loan.

With the way the economy is we are having a hard time making ends meet. We live paycheck to paycheck. Each time I have spoke with Americredit they will not work with us. We have even tried to get the car refinanced through our bank and the car isnt worth enough. We have had off and on problems with the car since we have bought it. There is no warranty. Just this morning on my husbands way home from work the car stopped running. My son had to run and get him and tow him home. He thinks its the fuel pump and the cost is 249.00. Now we are between a rock and a hard place!

Hey DC...if in IL the poster meets the 60% figure and the lender sells it...then am I to understand that the deficiency is uncollectable???

If so, then can the OC sell it to a JDB? And can the JDB legally collect???

I would also like to ask that IF we let the car go back we would rather do it voluntarily. My car payments have always been sent to Americredit in Phoenix Arizona. I live in Illinois so where would they have me return the car to? Also, when my husband got the car loan he put my mom down as a reference. I do not want them calling my mom. I know they called her one time a few years ago when we were late on a payment. I have told them since then to never call my mom again. I really do appreciate all of the help you all have given me. Thank you so very much!

Well, when you do a voluntary repo, they will tell you where to deliver the car. You will need to contact them.

Just know that if you do return the car, you will have a repo on your credit and that may prevent you from getting another car loan for awhile...voluntary or not, a repo is a repo.

Yes I understand that a repo is a repo. I would rather do it voluntarily to avoid the repo charges added on to the loan. Right now tho the car is not running at all so driving it to a drop off place is not an option at the moment.

Well if the creditor has to come and get it, they will charge those fees.

Sounds like your mind is made up that you want to voluntarily return the car. My suggestion is to make sure that this decision is the best choice for you. Best of luck. I hope everything turns out for you.

Our mind is not made up yet. We have a lot to think about. We just dont have the money right now to fix the car and send in a payment. I already know Americredit isnt going to be happy when we call to tell them the payment will not be made yet. It was due the first of this month. I had already called them and told them I would mail it in a few days. I am leaning more towards the voluntary repo since it broke down this morning. My husband says he wants to think it over for a bit before he calls Americredit. I will keep you posted.

I have another question! My poor husband works third shift and has not had much sleep today due to all of this! We were just talking about what to do and he is afraid that if we do the voluntary repo that Americredit would put a lien on our house. Can they do that? Thanks in advance.

1. I would call Americredit and see if they will work something out...perhaps a deferment of a payment or two...tell them the car broke down and you need to pay to get it repaired.

2. In this economy (especially) lenders are being a bit more leinent and are willing to work with borrowers. Explain to them your situation and see if they will re-write the loan, change your payments, SOMETHING!! Tell them that you need help, otherwise, you will voluntary give up the car...right now, they stand to make money if you pay off the car vs. losing money if they repo it.

3. If you give the car back, what will you do for a car? Do you have another? If so, do you need to have a second car? If so, can you pay to have this one repaired and perhaps trade it in for a better used car with a lower payment?

There are so many different options that perhaps will work out better for you.

As to your question above, in order to put a lien on your house, Americredit would have to sue you first, then obtain a judgement for the balance. If they sue you and win, you will end up paying for court costs, etc. (Many times, people are able to settle before it goes to court.)

You have many questions here, and IMHO, you might want to consult with an attorney...that way they have all the facts about your financial situation...we are only sharing our experiences and hope that they may be of some help to you...only you know your situation and what the best outcome will be for you and your family.

Good luck.

Thank you desperatelyseekingsanity for that response. We are going to call the attorney general in the next couple of days or states attorney. Yes we do have another vehicle that is paid for. We dont need 2 cars but like to have one as a back up. I dont want to call Americredit right yet as I do not want to tip my hand and have them come and get the car before we make a decision.

I'm confused...why would you need to be calling the attorney generals office? Did Americredit violate terms of your agreement? Was there fraud? If not, I don't believe the AG can help you.

If you need to speak with an attorney, find a local one...many will consult on the phone for free.

My husband thought it would be a good idea to contact the attorney general to see what the ramifications would be if we let the car go back. We are just trying to figure out what to do and how to go about it. If you think calling a local attorney will do then that is what we will do.

While you can certainly call the AG, I am not sure they are the right ones to talk with. They won't give you legal counsel on a personal matter...you would do better to talk with a local attorney.

No disrespect here...as an outsider looking in, it appears that you are trying to get out of the loan agreement that you took out when you bought the car because now the car is non-functioning, in addition to you stating that the $268 a month payments are becoming difficult. In life, many times we may have bought something on credit, only to have it break later...but we're still responsible for paying on it...under contract law we are still responsible for paying for the item.

If you are able to voluntarily repo the car, I am not sure what your liability will be for the remainder of the loan. Ask the attorney this. (On the surface, I would think that you would be responsible for the difference of what the bank sold the car for and what you still owed.) Perhaps someone else here can assist.

It's a shame that this will damage your credit.

Thank you desperatelyseekingsanity for your response. We had already been thinking about letting the car go back even before it broke down yesterday. I just hate dealing with Americredit. They are extremely rude and very hard to work with. I have read many horror stories on the net about them. I dont want to damage my credit. That is not my goal here. We already live at a bare minimum. The car payment honestly is the only thing in our budget that we could cut out.

I certainly understand. Keep in mind that a voluntary repo WILL hurt your credit. A repo is still a repo.

I would call Americredit and ask to speak with a Manager or their Loss Mitigation Department. Don't bother will the customer service/collectors. Explain to the manager that the car has mechanical problems that require you to fix it in order to get it operational and that has put you in a financial bind. What can they do to help you? Can they restructure the payments for a lower amount? Otherwise, you will be forced to voluntarily return the car (repo) to them...trust me...they won't want to hear that!! Otherwise, if your mind is made up that you want/need to dump the car you can certainly do that too.

I just called an attorney. I told him about the law I had heard about that if you paid a certain percentage that you may not be responsible for the rest. He said that is not a law. I asked if they could take my house and he said they could put a lien on it. He also said that they could garnish my husbands paycheck, checking and or savings accounts. He said I could file bankruptcy on them tho. I would have to list all of my debts and reaffirm with the ones that I didnt want to file on. So...........My husband is going to call Americredit tomorrow and see if we can work something out. I will keep you posted. Thank you so much for all of your help on this matter.

Good luck...let us know how it goes with Americredit!

Try talking with another attorney, get a 2nd opinion. Go to one that deals with contract law, check your yellow pages. You might even get more help from one of those auto accident attorneys because they should know every loophole about auto financing. Failing that, there are legal Forums that are staffed by attorneys who answer legal questions (without giving legal advice).

1) Did you tell him the statute that DebtCruncher posted?

2) IF they sue you and win and you do not pay according to the arrangements set up by the court, only THEN can they put a lien or garnish your wages. :roll: Where did this attorney go to school? See:
"http://www.fair-debt-collection.com/state-garnishment-laws-2.html#14"

3)Bankruptcy?! :shock: That's like using a chainsaw when a simple hatchet will do! You shouldn't even consider bankruptcy unless you are over $25K in debt and your job situation has drastically changed (like a sizable cut in pay) and you have no way out (as you will have to liquidate all your assets minus your state exemptions). Bankruptcy should be saved as an absolutely last resort. It is obvious that this guy is a bankruptcy attorney and wants to scare you into filing because he hopes he'll make money off of you. However, if you *do* have a lot of debt that you don't mind going away, then perhaps. But for a few thousand in car payments?

It is obvious that you are stuck in a bind and you have no easy solution. It's rather difficult when you are stuck with a lemon and I completely understand your frustration and concern in this matter. It's hard to tell what they would do if they repoed (voluntary or not) a car that doesn't run but at any rate as soon as any credit cards you may have get wind of that, they will raise your interest rates which will increase your monthly payments - and depending on your current interest rate, number of cards, etc. the raise in interest *could* equal the car payment and so you are back to square one. On top of that, the repo itself will smack your credit score around - but your credit cards jacking up your interest rates will really punch it in the nose.

Another way is to just stop driving the car, register it as a non-op, finish paying it off, and then junk it. While that seems drastic on first go, the non-op should allow you to suspend the insurance on it and you won't be paying for upkeep on it. While this is probably upsetting (paying on a wreck), it may be the least expensive solution - as non intuitive as that sounds.

So it totally depends on the situation you are dealing with. If you don't have many credit cards, perhaps it's worth letting it repo and working on a settlement to pay it off. But without knowing your financial picture, it is quite impossible to advise you one way or another. I sympathize with your dilemma and I wish you the best.

Thank you ChrysHenderson. It was a bankruptcy attorney that I called. I have no intentions of filing bankruptcy I just didnt know what kind of an attorney to call. I asked him about the statute that DebtCruncher posted. He said that was not a law. I said oh ok. So then I said to my husband how can that be when I read it on more than one site. My husband says it is a law but maybe this attorney doesnt think it can be enforced. The attorney said that if we let the car go back we would be responsible for the rest of the balance after the car was auctioned off. He also said they could garnish my husbands paycheck and checking and or savings. We dont have a savings! If I did the car would already be repaired. Its still in the driveway with a tow strap still hooked on to it. I just dont have the money to fix it yet. Oh and the attorney said they could put a lien on our house. That was enough to scare me! We do not have any credit cards. I am thankful for that. Our bills consist of a small bank loan, utilities, house payment, car payment, life insurance, and car insurance. We dumped cable tv a few weeks ago to save money. We have cell phones but no land line. Believe me we have no extras. I even dropped my high speed internet to low speed. My husband did call Americredit yesterday and told them our situation and that we could not make the payment until next week. We are being charged 2.50 a day for every day that the payment is late.

depending on how far past due you are right now, i know for sure americredit hands out 2 month deferments like they are going out of style. so if you need a few months to weigh all your options then that might be an option. as far as a vol repo goes (depending on how far past due your acct is) it will go to their vol department and they will either fax or mail you a voluntary surrender form, once you sign and send it back to them they will assign it to an agent in your area to pick up. so even if you take it to the agent they are going to charge you a repo fee no matter what, but a vol repo fee is cheaper than an invol repo fee. like i said earlier if your account is already 3 months past due then a 2 month deferment is going to prolong the enevitable. but if your only a few weeks past due then the deferment might help and give you adiquit time to get the vehicle fixed before your next payment is due. and the 2.50 a day you are being charged is because your loan is a simple intrest loan based off of a daily intrest rate, i would say the majority of auto loans out there are simple intrest, there are some pre comp loans but especially with a sub prime lender the precomp loan isnt as common.

Sorry I haven't been around much lately to respond.... I'm also on my way out the door (Fri night :) ) I promise I'll be back tomorrow to weigh in some more.

DebtCruncher Have a great Friday night! I am looking forward to your next response on this matter. This whole mess has taken over my life!

Re-reading everyone's posts, everyone else has given good advice and probably just about the same thing I can say.

In reality the law I quoted probably doesn't do very good for you because it does state that you would have A) have to return it at their request, and B) in ordinary condition. So far they have not requested you to return it, and currently it is not running (which means you wouldn't be returning it in ordinary condition), so those laws don't apply at this moment. To that effect, they would sell the car for whatever they can get, and you would still be responsible for the balance.

Your best bet at this moment is going to be working with Americredit. Keep in mind their collectors are trained to get you to pay the full amount, and they're going to threaten with repo and lawsuits, etc. The reality is that the collector you're speaking with probably doesn't have authority to issue a repo order or lawsuit.

Call them, ask to speak to a supervisor or the collections manager, explain your situation. The car is broken down in your driveway and not running. That alone will probably change their attitude, because they don't want to repo a "piece of crap" (for lack of better words). Tell them you can't afford the payments anymore, and you want to pay it off but can't send the whole amount. Pick a number and tell them how much you'll pay every month (maybe you can do 1/2 payments). If they persist and absolutely will not accept anything less than full payments, then tell them they may as well come get the car. That statement will probably get them to change their attitude. Because they really do not want to come get it, but like I said it is their job to play hardball to get you to pay the full amount. When you tell them to come get the car and they know you're serious, they'll probably agree to accept partial payments.

Good advice DC...keep in mind, any payment less than the full amount will negatively impact your credit score...I would seriously try to renegotiate the loan with them...see if they can re-write it so your payments are less.

I don't know your personal situation...just thinking of options here...is it possible to get a part-time job so that you can meet this loan obligation?? You're only 18 months away from having it paid in full. Pay as much as you can on it as quickly as possible and then you'll be done with it.

Let us know how it goes with Americredit. Good Luck!

I am going through the very same thing with Americredit. I financed $17,000, and been paying $450 for over 2 years; on time and I still owe $14,800. I called them the other day to try to get a few months of deferred payments because my wife is not working because she is now on bedrest. They said there is nothing they can do for me, and still tried to set up payment, when the whole point of the call was to explain that I can't make a payment.

Well I want to tell them to come get it even though I am current on the loan and never been late. I just can't afford to juggle bills around anymore. I just don't want them to take me to court and have a judgment, and then I pay for a car I don't even have anymore.

Let me know the update, I would like to know what action Americredit takes.

I hate that banks can run to the government for a bail out when they can't pay their bills, but when the consumer runs into hard and difficult times, we need to pay because it is in our contract. That is true, but I have been loyal for over 2 years, and paid over 10,000. You would think they would have some customer appreciation and give me a few months of relief until I get on my feet.

Quote:

Ugh! Americredit I do not envy your position. They are one of the absolute worst subprime lenders out there. They will not re-finance and they are RUDE, RUDE, RUDE! You couldn't pay me to deal with these scumbags.

Americredit is a monster with the deferred payments DO NOT DO A deferrement It sounds like these are Americredit Employees tring to trick you into a deferrement plan your interest per day depends on your daily intersest on your loan. And americredit only allows 3 within the contract and only one date change to help save you. So they say, but do forget to explain the total that is due all in full and the muture date of your loan not the date on your contract I am talking about the new total after your deferrements

The interest does not stop when you defer a payment. Interest will continue to accumulate to be paid from the proceeds of subsequent payments. This has a trickle-down affect on all future payments thereafter (more of each future payment will be applied to interest than would be if you paid per the original terms). If you defer relativiely early in the note, and you have a high interest rate, it could possibly add $2000-3000 in interest over the life of the loan.

Quote:

Really dont know what a lawyer is going to do for you....you probably should have read your prom note prior to turning in the vehicle. Deficiency balances are nothing new and being sued for them is common place. Your only option would be to file bankrupcty to stop the ganishment.