My daughter\’s car was reposed last year. Can the finance company take her to court for the unpaid balance?
She has asked for proof that when the car was sold at auction that there was not enough to cover the balance of the loan, and she has received no proof. When called by the finance company she has cooperated by telling them just how much she could pay on a monthly basis, but was always told that ‘we’ll look into that and get back to you’. She feels that because the finance company reposed the car, and failed to get enough money for it at auction, she should not be liable for any outstanding monies.
That’s not the way it works. She is liable for the difference between the balance due on the loan and what the car was sold for. If she does not pay this before they go to court she will also owe for the lender’s attorney fees and court costs. They will take her to court if the balance is over $ 100.00
yes the can and will. talk to a lawyer.
It depends on how the contract was written when she purchased the car. If it was written in the contract the this is how the company would recoup any unpaid funds in the event of a default on the loan and your daughter signed the contract then they have that right to the performance of the contract. This might be subject to the laws of your state but I would think they are within their rights.
YES THEY CAN AN THEY WILL ,I HOPE YOUR NOT THE CO-SIGNER BECAUSE YOU WILL BE LIABLE GOOD LUCK.
I’m not sure what state you are in, but in most states that I am aware of, the finance company or bank that she borrowed from has a legal obligation to sell the reposed car at an auction to protect you and them from any liability. If the car brought less than your daughter owed, she is responsible for the differance. You may need to check with your Consumer Credit Agency in your state. It will probably affect her automobile credit for a long time. The finance source may be able to file a lein or judgement against her, which would not allow her to get credit anywhere without the lein or judgement being paid off. I wish her luck……..Most finance company’s will settle for 20% on the dollar, so if the car is gone and her credit is hurt, use this leverage to your advantage! If I can help more, just E-mail……..former business and credit manager with large finance company………Good Luck
I worked in Repossessions for a Finance company… but it is really dependent upon the situation and circumstances and the state laws that govern recovery. A finance company can seek the remaining balance after the car is sold at the auction.
If the person declared bankruptcy prior to the repo then chances are that the finance company can’t recover anything but the vehicle… but it’s really something she’d need to talk to a lawyer about.
Typically though at auction you will get less than NADA which is the system that most finance companies use to assess the value of the car (like the mileage, year of the car and make.)
Typically once the car has been sold at auction then the file is turned over to the legal department to see if the case is worth pursuing… i.e. if there is a huge balance remaining… you can be certain that they will come for it… and try to recover what state laws allow for.
A repo voids the original contract, so don’t waste your time looking over that contract, as another poster recommended.
Creditors generally only recoup only a portion of what is owed. Not only is the debtor liable for the deficiency (which could be about 1/2 the amount owed on the car) but also all of the fees that come with a repo. As long as the repo is a legal repo.
The original creditor “must” send all documents within a reasonable amount of time. They have to send the intent to repo letter, the intent to sale letter and the deficiency letter after the sale. If the original creditor fails to send those documents, that would make the repo an illegal repo.
Repos fall under the UCC title 9. But you also need to find your own state statutes concerning repos.
I would suggest going to the site that I’ve listed and do a search in the forums on repos.
she has to pay the difference