Do we have to pay the remaining amount on a repossessed car? 22 Answers as of January 21, 2011

Our vehicle was repossessed a year and a half ago. Now they want us to pay the remaining amount that they did not get out of it. My question is do we have to pay for something that we don't even have anymore?

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Ursula G. Barrios Law
Ursula G. Barrios Law | Guillermo Machado
You do have to pay for it or they can sue you for the deficiency. If you file BK, you won't have to pay for it anymore and can fix up your credit months after the fact. Thank you.
Answer Applies to: California
Replied: 1/21/2011
The Shakoori Law Group
The Shakoori Law Group | Rachelle Shakoori
When you failed to pay for the car, you breached your contract with them. Typically, once they repossess the car, they sell it at an auction and they come after you for any deficiency. If you filed bankruptcy after the repossession, they can no longer come after you for the remaining balance as it's a dischargeable unsecured debt.

I highly recommend that you retain an experienced bankruptcy attorney in your jurisdiction to guide you through the complexities of bankruptcy law and procedure.
Answer Applies to: California
Replied: 1/20/2011
Gus Johnson Attorney at Law
Gus Johnson Attorney at Law | Gus Johnson
Normally you are still liable for the balance on a car loan after a repossession.
Answer Applies to: South Dakota
Replied: 1/20/2011
Law Office of Harry L Styron
Law Office of Harry L Styron | Harry L Styron
You are obligated to the full amount of the balance on the financing, regardless of the value of the car.
Answer Applies to: California
Replied: 1/20/2011
Uriarte & Wood, Attorneys at Law
Uriarte & Wood, Attorneys at Law | Robert G. Uriarte
The answer is yes. You are responsible for the difference between what they sold the car for, plus costs of sale and what you owed on the car. This is called a deficiency and they can file suit against you for that amount plus interest. It is however, a debt which can be discharged in bankruptcy. Your best strategy is to speak to a lawyer about your best option either through entering into a settlement agreement for some discounted amount or a complete discharge of the debt through a bankruptcy.
Answer Applies to: California
Replied: 1/20/2011
    George Hoselton Bankruptcy Attorney
    George Hoselton Bankruptcy Attorney | George Hoselton
    Unfortunately the answer is yes. Even though you returned the car, you are still responsible for the debt. It's typical for a creditor to sell the vehicle and then come back to the debtor for the difference of what they sold it for and what was originally owed. Filing bankruptcy will make this go away.
    Answer Applies to: Oregon
    Replied: 1/20/2011
    Janet A. Lawson Bankruptcy Attorney
    Janet A. Lawson Bankruptcy Attorney | Janet Lawson
    Yes, this is called a "deficiency balance." It is the difference between what you owed and what they sold it for. This is d debt you could discharge in bankruptcy.
    Answer Applies to: California
    Replied: 1/20/2011
    Diana K. Zilko, Attorney at Law
    Diana K. Zilko, Attorney at Law | Diana K. Zilko
    A deficiency is a common occurrence when vehicles are repossessed. Even though they have the car, they will still seek any difference between what was owed and what the car is later sold for. Many people in this situation look to see if bankruptcy is a good option for them, since qualified persons can discharge not only a deficiency, but credit card debts as well. If you have any further questions, please let me know.
    Answer Applies to: California
    Replied: 1/19/2011
    DiManna Law Office, LLC.
    DiManna Law Office, LLC. | Dawn DiManna
    Yes, they can take you to court and get the deficiency ordered or it can be forgiven through bankruptcy.
    Answer Applies to: New Hampshire
    Replied: 1/19/2011
    Judith A. Runyon, Esq. Attorney at Law
    Judith A. Runyon, Esq. Attorney at Law | Judith A. Runyon
    Yes, you do have to pay the remaining balance.
    Answer Applies to: California
    Replied: 1/19/2011
    Law Office of David P. Farrell
    Law Office of David P. Farrell | David Farrell
    It is likely that at the time you purchased the now repossessed vehicle you agreed that if the situation you described occurred, the lender could look to you for any resulting deficiency between the balance owed on the purchase price and the repossession sale price. When you defaulted on the loan, the lender looked first to the "security" the vehicle by repossessing and selling it, however, at a loss. The fact that you no longer have possession of the vehicle does not affect your obligation on the promissory note it secured.
    Answer Applies to: California
    Replied: 1/19/2011
    William C. Gosnell, Attorney at Law
    William C. Gosnell, Attorney at Law | William C. Gosnell
    Hire a lawyer and file a Chapter 7 Bankruptcy. Otherwise yes you will have to pay.
    Answer Applies to: Tennessee
    Replied: 1/19/2011
    Law Office of Aaron Nielson
    Law Office of Aaron Nielson | Aaron Nielson
    It depends in part on the law where you live. Contact an experienced bankruptcy attorney.
    Answer Applies to: Washington
    Replied: 1/19/2011
    The Hollingsworth Law Office
    The Hollingsworth Law Office | Tyler Hollingsworth
    Your question didn't mention whether you are filing for bankruptcy. If you are filing Bankruptcy, then No, you probably do not have to pay the remaining debt. If you're not filing Bankruptcy, the financing creditor can still sue you for the balance owing.

    If your car was repossessed, the finance company will sell the car at auction and apply the proceeds of the auction sale towards the debt you owe. Repossessing the car means they have taken back the security interest (also known as the collateral) on the loan. Once they have taken the security interest back, there is no longer any collateral securing the loan. In Bankruptcy, unsecured debt is dischargeable and you will not have to pay the remaining debt. If you have not filed for bankruptcy, the finance company can still try to collect the unsecured amount of the debt from you via collection action or lawsuit.
    Answer Applies to: California
    Replied: 1/19/2011
    Carballo Law Offices
    Carballo Law Offices | Tony E. Carballo
    Yes, you do owe for the balance of what is owed on the car after whatever was received by the bank from the auction sale. You are liable for that deficiency unless there is a legal defense that would excuse you from paying it. You do not have the car because you did not pay for it. Therefore, even if you do not have the car you still have to pay what you owed on it when it was repossessed and the costs of the storage, sale, etc. If you debts are sufficient to make it worthwhile then bankruptcy may be an option to discharge that and other debt. If not, then you can try to work out a settlement. If you are sued then you need to hire a lawyer to represent you and the lawyer will determine if there are any legal defense that could get you out of paying what the bank wants or paying less.
    Answer Applies to: California
    Replied: 1/19/2011
    The Law Office of Mark J. Markus
    The Law Office of Mark J. Markus | Mark Markus
    Most likely, depending on the terms of your contract. I've never heard of a case where a vehicle as collateral was sufficient to cover a loan balance after sale. You can, however, avoid paying it by filing bankruptcy.
    Answer Applies to: California
    Replied: 1/19/2011
    Greifendorff Law Offices, PC
    Greifendorff Law Offices, PC | Christine Wilton
    Yes. You are liable for the deficiency. If you file bankruptcy, that debt is dischargeable.
    Answer Applies to: California
    Replied: 1/19/2011
    The Pedigo Law Corporation
    The Pedigo Law Corporation | Brian T. Pedigo, Esq.
    You did not indicate whether you have filed a bankruptcy. This will affect the answer.

    If you did not file bankruptcy and you live in California, yes, they can collect the difference after repossession and auction. Proper repossession is key, and you may have a case (a defense and counterclaim) if they did not follow California law.
    Answer Applies to: California
    Replied: 1/19/2011
    Steven D. Keist, Attorney at Law
    Steven D. Keist, Attorney at Law | Steven D. Keist
    Yes, you are responsible for the deficiency balance on a repossessed vehicle.
    Answer Applies to: Arizona
    Replied: 1/19/2011
    Sussman & Associates
    Sussman & Associates | Mitchell Sussman
    Unless you discharge the debt through BK...Yes, you will have to pay the deficiency.
    Answer Applies to: California
    Replied: 1/19/2011
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