Repossession

beanwabrNovember 15, 2010

I had my van repossessed last week. This is a first for me and I have no idea what to expect and it scares me. It was an '04 (bought used 2 1/2 yrs ago) and just over $15,000 was owed; it was slowly but surely falling apart. I understand that it'll go for auction, but what if it only gets, say $5,000? Will I still owe $10,000 on a vehicle I no longer have? Things have been rough with my dh's business because of the economy and I haven't been able to nab a job. We didn't mean for this to happen. I hear that I won't go to jail but what do you do when you can't pay?

I know several people who have been repo'd but they only said that they didn't pay anything towards it, how, I have not a clue. Will I be sued? How long will my credit be ruined? What happens now? I've been worrying myself sick and my nerves are shot!

Can anyone provide advice? I mean, it will eventually be ok, right? Gosh, I hate this :(

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Billl

There is no such thing as debtors prison in the US, so you certainly aren't going to jail.

Quick semi-related note: You can go to jail for failing to appear at court hearings. If you get sued, you have to go. Ignoring it will only make matters worse.

Each state has its own laws. Typically, there will be a process for selling the vehicle. It will like get below market value and you'll be charged a bunch of fees on your account. You'll likely be responsible for any shortfall.

What happens next depends on the lender. Many will send you a bill and some threatening letters/phone calls to try to get you to pay. Eventually, they will either sue you or sell the debt off to a collection agency. They have all you info, so if they see you don't have money, they will probably just send it to collections.

Yes, this is going to trash your credit - for years. That isn't the end of the world, but it will make getting future loans challenging. You'll be best off saving up some cash and buying a junker while your credit recovers.

Will it eventually be ok? Of course. It will take a while to work through and it will be massively annoying. I would strongly recommend getting in to see a credit counselor. The link below is to the legit organization. Click on the site and find one in your area. Do NOT call any of the scam people you see advertising.

Here is a link that might be useful: credit

    Bookmark   November 15, 2010 at 9:43PM
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maifleur01

Don't forget the IRS. Depending on how everything is settled if the company issues 1099's make certain they have your current address. You can ask if they send 1099's some do, some don't. The difference between what was owed and expenses for selling and what price it is sold for can be considered taxable income to you.

    Bookmark   November 16, 2010 at 10:59PM
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