Mar
11
My girlfriend is behind on her car loan and has been threatened with repossession. To make matters worse, she?
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My girlfriend is behind on her car loan and has been threatened with repossession. To make matters worse, she had an accident (her fault) the same day her insurance lapsed and did $3000 damage to the car. She cannot afford to repair the car or make payments anymore so she is going to give up the car for voluntary repossession. My question is: When the car is sold and the deficency amount is calculated, will making a small payment each month keep them from pursuing a judgement against her?
Optional Information:
Dallas, Texas
Passive Income
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6 Comments
March 11th, 2009 at 3:38 pm
They will go after any cosigners first.
March 13th, 2009 at 2:14 am
it would certainly go in her favor
March 15th, 2009 at 11:30 pm
Depends on how the bank conducts their business, With the car now being a worthless hunk, the bank will most likely go after a co-signer. If there is no co-signer then they will persue a judgement aginst her. They already know she can not pay, is unable to insure the car and has basicly distroyed the car in the process, so likely co-signer is next then the judgment. either way the bank will look at getting the remaining balance on this car since they can not resell it for what it would have been worth prior to the accident.
March 16th, 2009 at 5:08 pm
well if she has a cosigner they well go and ask him or her if they can help her but if not than it will be bad for her because of the money she spend on paying for her car will be gone for nothing and also it will put a bad credit in the her history so maybe she will not get a loan anymore but here what i can say that she need to find another mechanic that can fix her car for less and if she find one. she need to get the part by herself from eBay.com because it cheaper their and after she get the parts and than she need to take the parts to the mechanic to install them but before that she need to find out the damage of the car, i mean all the parts and after that she can take an action or also she can ask for her some close friend or relative to loan her some money so she can get back on her feet and if no body can help she can apply for some loans and hopefully she will get one but i just want to know how did she get into the accident because her insurance should cover the damage of the car if she insure it for full coverage. God I hope something work for her.
March 17th, 2009 at 2:15 pm
No…The bank will offer you a payment plan to pay back the remaining balance. This does not mean that the payments will be small. They will go after the co-signer if there is one. If she decides not to pay them back they can actually garnish her wages with a court preceding and judgment against her. Since her credit is probably screwed up anyway and now she will show a repossession, you have an option.
Once you find out how much the bank is going to want, you can negotiate it. The bank is not likely going to go to court and waste money getting a judgment if the balance owed is not a substantial amount. Substantial meaning $20,000 and up. Lets say they want $12,000. If I were you, I would tell them you aren’t paying anything or you will pay them $7500 over a two year time frame. Sometimes they will settle for a lot less if you can pay them immediately. Then they will place a note on your credit report that shows “SETTLED FOR LESS THAN FULL BALANCE”.
This is not a foolproof plan though. It depends on the amount and the banks policies. Large banks like Ford Credit and GMAC will due the above mentioned 9/10 times to avoid legal fees.
Hopes this helps….BTW..If she needs a new car, now is the time to get it before the REPO or Settlement shows on her credit report. CapOne, HSBC, WellsFargo, Drive Financial are a few banks that have programs that will approve her even though she had a slow paid car loan.
March 18th, 2009 at 11:58 am
Only if the finance company decides to accept the minimal payments. Don’t bet on it, however. Small consolation though, as you live in TX they cannot garnish her pay. Of course, her credit will be trashed for upwards of a decade with a judgment and a repo on it.