What does it mean when your car is repossessed and you still owe money?

HomeWhat does it mean when your car is repossessed and you still owe money?
What does it mean when your car is repossessed and you still owe money?

If your car or other property is repossessed, you might still owe the lender money on the contract. The amount you owe is called the “deficiency” or “deficiency balance.”. If your car or other property is repossessed, you might still owe the lender money on the contract.

Q. How does a voluntary repossession work?

In a voluntary repossession, you return your vehicle to your lender when you are unable to make payments. You inform your lender you will not make payments going forward and that you want to surrender the car. Then, you schedule a time and place where you bring the vehicle (and a ride home), and you turn over the keys.

Q. How long does a voluntary repossession stay on your credit?

seven years
Voluntary surrender and repossession are both loan defaults, which stay on your credit reports for seven years. That type of negative mark will harm your scores, especially your automotive-specific credit scores.

Q. How do I recover from a voluntary repossession?

Before you decide to turn in your car, consider whether any of these options could help improve your situation.

  1. Contact your lender. Let your lender know you’re struggling to make payments.
  2. Refinance your car loan. Work with your lender to see if you can refinance your loan.
  3. Sell your car.

Q. When does a repossessed car have a deficiency balance?

When your lender has your car or other property repossessed, it sells the property, usually at auction. If the proceeds from the sale don’t cover the total of what you owe to the lender—they rarely do—you might be liable for the balance, called a “deficiency” or “deficiency balance.”

Q. When to start the repossession process after missed payment?

Although lenders may have the legal right to start the repossession process the day after a missed payment, most give customers a grace period of at least 10 days when they won’t even charge a late fee. If you’re in this situation, the time to act is now.

Q. How can I get my car back after repossession?

One option is to get current on your past-due payments and pay repossession costs, which will get your loan reinstated. 8 You’ll get the car back, and you’ll be back in roughly the same position you were in before repossession (although your credit will still show the default).

Randomly suggested related videos:
Should I Voluntary Repo My Car To Get Out Of The Payment?

Should I Voluntary Repo My Car To Get Out Of The Payment?Nix the guesswork and scrolling. We’ll connect you with investment pros we trust: https://bit.ly/3hc…

No Comments

Leave a Reply

Your email address will not be published. Required fields are marked *