I recently bought a car and I was notified I was being laid off, what are the consequences of the car being repossessed? 12 Answers as of July 02, 2015

I recently bought a car and I was notified I was being laid off. What is the consequences of the car being repossessed. Will I still owe the car. I'm 20 years old and I haven't made my first payment. I need help I really do I don't have any credit to begin with so it doesn't matter if my credit gets shot. What are my next step already talked to the finance company they said I still owe the car even if it gets repo'ed. But what if i file for bankruptcy what would happen.

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Law Offices of Joseph A. Mannis
Law Offices of Joseph A. Mannis | Todd Mannis
Usually, it goes like this. They take the car. They'll sell it at auction. Usually they'll sell it at an undervalued price. Then you get a letter that says "you owed 20,000 on the car. We were able to sell it for $8,000. Therefore, you owe us a deficiency of $12,000, and eventually they will sue you for it. Obviously I am just using numbers as an example, so I don't know what the deficiency in your situation would be. But that's how it usually plays out, and if that is the case, bankruptcy would wipe out that deficiency. You woudn't have to pay it, and the debt would be discharged.
Answer Applies to: California
Replied: 7/2/2015
The Law Office of Darren Aronow, PC
The Law Office of Darren Aronow, PC | Darren Aronow
The creditor will repo the car and auction it. You will be liable for the difference of what you owe and what it sells for.
Answer Applies to: New York
Replied: 7/2/2015
Janet A. Lawson Bankruptcy Attorney
Janet A. Lawson Bankruptcy Attorney | Janet Lawson
If you file for bankruptcy you will not be liable for the deficiency when the car is sold at auction. The deficiency is the difference between what you owe and what it sells for. What a rotten thing to happen to you.
Answer Applies to: California
Replied: 7/2/2015
A Fresh Start
A Fresh Start | Dorothy G Bunce
When a car is repossessed, it is usually sold at a dealer's auction at a give away price. The lender then has the right to sue you for what is called a deficiency, which is the difference between the sale price and the balance you owe on the loan. Often this will be thousands of dollars or even tens of thousands of dollars. This is the kind of debt that CAN be discharged in a bankruptcy, but I hate to recommend bankruptcy when you only have one debt.
Answer Applies to: Nevada
Replied: 7/2/2015
Law Office of Marlin Branstetter
Law Office of Marlin Branstetter | Marlin Branstetter
If the car is repossessed you will owe any any deficiency balance (the difference between what the finance company sells the car for and what you owe on it.). If you file bankruptcy that amount would be discharged and you would not have to pay.
Answer Applies to: California
Replied: 7/2/2015
    Charles Schneider, P.C.
    Charles Schneider, P.C. | Charles J. Schneider
    Bankruptcy would eliminate the remaining car debt.
    Answer Applies to: Michigan
    Replied: 7/2/2015
    Richard B. Jacobson & Associates, LLC | Richard B. Jacobson
    Bankruptcy should release you from the obligation. Find a skilled BR lawyer; it is almost always worth the investment.
    Answer Applies to: Wisconsin
    Replied: 7/2/2015
    Ferguson & Ferguson
    Ferguson & Ferguson | Randy W. Ferguson
    They usually sell it and pursue you for the difference. You can bankrupt if necessary.
    Answer Applies to: Alabama
    Replied: 7/2/2015
    Ronald K. Nims LLC | Ronald K. Nims
    If your car is repo'ed, they will sell it and if the sale price is less than the loan, you'll still owe the difference. I advise against filing bankruptcy unless you have at least $10,000 in debts.
    Answer Applies to: Ohio
    Replied: 7/2/2015
    Garner Law Office
    Garner Law Office | Daniel Garner
    This is an unfortunate twist of fate for you, but I would not advise filing bankruptcy just yet. If you can't make the payments, offer to surrender the car or try to sell it yourself. You won't know for sure how much you will owe until the car is sold. Then if it's too much for you to pay off over time, you should consider bankruptcy. That would discharge the debt, but at a high price for your credit rating. If you keep the repo off your record, it will be easier to finance another car when you go back to work.
    Answer Applies to: Oregon
    Replied: 7/2/2015
    Stephens Gourley & Bywater | David A. Stephens
    If the car is repossessed it will be sold at auction. The amount of the loan left unpaid after the sale will be owed by you. They can sue you to collect it. Bankruptcy will stop any collection efforts.
    Answer Applies to: Nevada
    Replied: 7/2/2015
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