Unveiling the dark side of auto loan defaults and vehicle repossessions.
Friday, June 23rd Unveiling the dark side of auto loan defaults and vehicle repossessions.
As a bankruptcy expert attorney, I am here to help you navigate complex financial situations with informed advice and a strategic approach. Remember, the consultation is free.
In instances where an auto loan goes into default, leading to the vehicle being repossessed and subsequently sold at auction, the sales proceeds are typically applied to offset the loan balance. However, there is a common scenario where the auctioned price of the car falls short of the outstanding loan amount. This discrepancy, termed as the deficiency balance, becomes the borrower's responsibility.
To illustrate, if the outstanding balance on your auto loan is $15,000 and the car fetches $10,000 at auction, the $5,000 difference remains your obligation despite the vehicle no longer being in your possession.
Lenders have various means to collect this deficiency balance, which can include transferring your account to a collections agency or even initiating a lawsuit to recoup the balance. Should you find yourself in such circumstances, it is crucial to consult with a legal expert to understand your rights and to strategize how best to address this debt.
Depending on your state's laws, your specific financial situation, and the precise terms of your loan agreement, you may have multiple options at your disposal. Please note that the above information aims to provide a general understanding and should not be considered as legal advice. For advice tailored to your unique circumstances, always consult with an attorney.
If you need assistance with such financial difficulties, don't hesitate to reach out. Call us at 626-338-5505 to schedule your free consultation. Let us help you on your journey to a fresh start.