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I have a 1 year old car that is upside down ,000. I’m still current on the payments but it’s either a large mortgage and food or the car. I have to let it go. SUCKS for my credit but I made a poor decision in buying it, don’t preach (don’t need moral/ethics lessons right now). I do need to know what’s next. Can they garnish wages in California? Or sue me in court? Attach my house? Send Guido with a bat? At this point I don’t care about my credit cause I don’t owe anything on credit cards, I already have a house (no equity though) and I have another car that is paid off. I can live without good credit for another 10 years but I don’t want to get a lawyer.

6 Comments »

1. 

   After the car is repoed, it will be sold at wholesale auction and your will owe the difference between the sale price and the amount you still owe on your loan. And they will use any means possible to get that money.

   Of course, you know your credit will be trashed for 7 years — no loans, no credit cards, no mortgage refinances, no department store cards, etc. Also know that your credit score will affect your car insurance (with most insurance companies) and might even affect your ability to get jobs, TV cable service, telephone service, or utility services for your home.

   Comment by peterthegreat — July 2, 2011 @ 11:26 pm

2. 

   Repos are very common right now. While they will damage your credit, when the credit market loosens up again you will be able to re-establish car credit.

   As for what the lender can/will do: First they will sell the car to determine the outstanding balance, they will send a statement of what you owe. After a month or so they will start calling you to try to collect. They will offer a payment plan and try to work with you. After that they may go after a lien on your house. It is doubtful that they will go through the process of suing you for a judgment to garnish your wages. The lenders’ hate to lose money and hate throwing good after bad.

   If they get too nasty with you, you can file bankruptcy. This may the best thing to do anyway. It will lower the amount you would have to pay and the repo will fall off of your credit in 7-10 years. Without a bankruptcy the repo will just be reported over and over as the bad debt is resold.

   Good luck

   Comment by fencepro — July 2, 2011 @ 11:26 pm

3. 

   They will come after you for your deficiency balance so it might be good to "take it in" to save on repo fees.

   They wont come after your house with no equity but if you have a garnishable job and resist collection efforts they can and probably will eventually sue you, obtain a judgement and then garnish your wages.

   Then it could be really bad. Think about getting by with 25% of your wages taken out before you get your check.

   Nobody is coming after you with a bat.

   I dont have enough experience to advise you what to do as far as avoiding garnishment but generally, if you are making regular payments, they will not want to spend the money to sue you.

   Thats usually a last resort.

   That said, you cant pay $5 a month on a $15,000 balance and expect that to suffice.

   The financier will attempt to get as much money as possible for your car at wholesale auction but you will still owe a lot.

   It might be best to work something out in the $50-100 a month range to keep them from garnishing your wages.

   Now, if you have a non-garnishable job, get paid in cash or work for yourself, their ability to collect is diminished.

   As you know, it will hurt your credit.

   Comment by N T — July 2, 2011 @ 11:26 pm

4. 

   If your car gets repoed , this will happen .

   Yes you are still responsible for the loan. They will dispose of the car for pennies on the dollar(they dont care your going to make up the difference) and send you a bill for the balance plus repo and auction fees.

   They will send you a demand letter for the loan balance and you will have 30 or 60 days (time varies) to pay in full.

   If you don’t they will sue and win.

   Then they will garnish wages or attach assets until paid for.

   Giving the car back doesn’t relieve you of the debt .

   And the repo will be on your credit report for 7+ years……..md

   Comment by Uncle Jed — July 2, 2011 @ 11:26 pm

5. 

   It looks like you have BOTH a car and a house to sell.

   Get with it.

   Comment by alfredb1979 — July 2, 2011 @ 11:26 pm

6. 

   The car and the loan are two separate things. If the car gets repossessed, you are still responsible for the outstanding loan amount. That will not go away and you are legally obligated to repay that money. They will sell the car at auction for a fraction of the actual value, subtract that from your loan balance and add in repo and legal fees, and that’s what you will have to pay. If you do not pay in full, they will obtain a judgment against you and then they can garnish your wages and attach your assets. One way or another – you are going to pay.

   Comment by Scott H — July 2, 2011 @ 11:26 pm

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