If your car-loan lender repossesses your car, van, truck, SUV, or other motor vehicle, it might sue you to recover any money you still owe on the loan (called the "deficiency"). If a repossession happens, you'll need to decide if it's worth paying an attorney to help you.
Can I be sued for a car loan deficiency?
If you are being sued for a car loan deficiency, do not ignore it. You still have an obligation to the lender for the deficient balance, even if you don’t have the vehicle. If you disregard a summons to appear in court, the case will proceed without you and a default judgment could be entered against you for the balance of the debt.
Can a lender Sue you after a car repossession?
Now Getting Sued by My Auto Lender Perhaps the worst thing about having your car repossessed is that even after your vehicle is gone, your lender may not be done with you. In some cases, lenders may file lawsuits against borrowers to recoup what they’re owed. In this blog post, we’ll look at what’s involved with being sued after a car repossession.
Should I file an auto financing lawsuit?
Furthermore, because filing an auto financing lawsuit can be a complex legal matter, finding the right attorney is important. An attorney can help you decide whether or not to file an auto financing lawsuit. They can help answer any questions or inquiries you may have regarding your potential legal claim.
What happens at the end of an auto loan lawsuit?
Auto financing lawsuits typically end with a monetary damages award being issued to the non-violating party, to compensate the plaintiff party for financial losses. For instance, the borrower might be able to recover damages and other costs if they discover that they have been paying too high of a monthly amount according to the contract.
Can you get in trouble for not paying your car payment?
If you are sued, don't ignore it. A default judgment could be entered against you for the balance of your car loan, which in turn could lead actions such as bank account garnishment, property liens, or in some states, wage garnishment.
Can I sue to get out of a car loan?
While some lenders may charge off the car loan balance after a repossession, lenders are in the business of making money. As such, a majority of lenders will take you to court for the remaining balance, known as a loan deficiency lawsuit. However, lenders usually give you ample time and warning before they go to court.
What happens if I dont pay deficiency balance?
If you refuse to pay, the debt will most likely be sold to collections. But either the lender or the collector can choose to file a lawsuit against you, which could result in a wage garnishment, a levy against your bank account or a lien against your other property.
Do I still owe money after repossession?
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."
What happens if car loan not paid?
If you keep defaulting on your car EMI payments, your lender will send you a notice asking you to pay the remaining balance on your car loan. If you keep defaulting on your car EMIs, your lender will take possession of your car.
Can I go to jail for hiding my car from repo man?
Will I go to Jail If I Hide my Car From the Repo Man? If your lender has received a court order compelling you to turn over the vehicle, then yes, you could go to jail if you disobey the court (often called “contempt of court”).
What are three possible consequences of defaulting on a car loan?
Lenders sell repossessed cars at auction, and if it doesn't recoup the remaining balance of the loan financing it, you'll owe what's called a "deficiency balance." Ultimately, the lender could sue you for the money you owe. Your wages could be garnished; a lien could be put on your home.
Can you negotiate after repossession?
Ideally, you should start these negotiations before the repossession process. If you negotiate after repossession, however, you may be able to use any questionable actions by the lender during that process to help bolster your bargaining position.
Should I pay off a repossession?
Tips. Paying off a repossession can help your credit score since it reduces debt owed, and you may be able to get the item removed from your credit report. However, the significance of impact on your score depends on your credit history and profile and whether you take a settlement.
How long are you blacklisted for after repossession?
A house repossession will stay on your credit report for 7 years, from the original missed payment (known as the original delinquency date). Naturally, the further in the past the account, the less impact it will have on your credit score.
What happens to your personal belongings when your car is repossessed?
Answer. If the repossessor takes your motor vehicle, you're entitled to get back all your personal belongings inside of, but not attached to, the vehicle when it was repossessed.
How can I settle my car loan debt?
6 alternatives to settling your car loanPay off the loan completely. Paying off your debt in full is always the best option for your credit.Modify your car loan. ... Trade in your car. ... Sell your vehicle. ... Allow your car to be repossessed. ... File for bankruptcy.
Carmaker-Owned Lenders Know That You Have Few Choices
People pay usurious interest on their vehicle loans either because they don’t know there are caps on allowable interest rates or they have no choic...
Consumers Are Taking Action Against Usury Lawbreakers
In New York state, the most a lender can charge for annualized interest is 16 percent. However, one of our New York clients was charged an annualiz...
You Should Be Compensated For Car-Loan Usury
It is the practice among some dealerships to aggressively push buyers into loans from lenders owned by or affiliated with the manufacturer of the c...
How Weitz & Luxenberg Can Help
As a nationally recognized personal injury, consumer protection, and class action law firm, Weitz & Luxenberg is committed to helping clients win c...
What are the most common issues involved in auto financing lawsuits?
Unfair lending practices; and. Various other related issues. One of the most common issues involved in auto financing lawsuits is a dispute over the loan terms. This can include disputes over loan amounts, payment periods, interest rates, and procedures for cases where a borrower fails to pay back the required loan amounts.
What is required for auto financing lawsuits?
Like any lawsuit, an auto financing lawsuit will require a lot of paperwork and documentation to ensure accuracy. Auto financing lawsuits require support through large amounts of documentation and evidence. Fortunately, since auto financing is a highly transactional field, there will usually be a large amount of documentation of the process.
Why are auto loans important?
Car loan laws help protect against loan fraud and other problems with the borrower lender relationship.
What documents are needed to support auto financing claims?
The claims may include loan contracts, company or agent certification documents, receipts, and payment receipts.
What is auto financing?
Auto financing describes the process of obtaining a financial loan to purchase a car or another type of vehicle. Some think of auto financing a vehicle as only the full purchase of a vehicle; however, auto financing also applies to the leasing of a vehicle. Auto financing is often managed through a car dealership, auto finance companies, ...
Why do people need auto financing?
Auto financing is put in place because some people cannot afford to purchase a new or used car at once or they cannot afford the initial down and monthly payments. The process of obtaining a car loan involves several steps, including: Dispersal of funds to the borrower.
Why is my auto loan denied?
If this happens it could be for many reasons. For example, it could be a problem with pre-approved financing, or it could be a mistake made by the car dealership. If you are denied an automobile loan you should be prepared and know what to do.
Why do people pay usurious interest on their car loans?
People pay usurious interest on their vehicle loans either because they don’t know there are caps on allowable interest rates or they have no choice. Carmaker- affiliated lenders know this. That is why some of them fix their interest rates higher than the law allows.
How much interest can you charge on a car loan?
The law says that lenders cannot charge more than 16 percent interest rate on loans. Unfortunately, some lending companies owned by or affiliated with vehicle makers have devised schemes whereby you are charged interest at rates exceeding the maximum permitted by law. This is called usury.
Is buying a car a major investment?
Buying a new or used vehicle is a major investment. Paying for it takes a big chunk out of your income. But most of us need vehicles for work, taking care of family and daily chores.
What happens after a car is repossessed?
After the sale of a repossessed vehicle, the lender may choose to collect the deficient balance through a collection agency or collection law firm. The borrower may receive collection calls or letters demanding payment. Collection contact must comply with the federal law called the Fair Debt Collection Practices Act.
What happens if you don't show up in court?
If you do not show up in court, the case will proceed without you and a default judgment could be entered against you. This means that a judge has ruled against you in non-criminal court, and you will be required to pay the damages or judgment amount.
Can a lender sue a borrower for a deficient loan?
The lender may decide to file a lawsuit against the borrower to collect the deficient loan balance. If you receive a summons from the court you must contact the court to let them know of your plan to defend the matter. You may choose to represent yourself, pro se, or hire an attorney to represent you.
