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Balance After Repossession

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Junior Member
What is the name of your state? NC

We had a car repossessed a few months ago. We received notice that it was to be sold and that we could either pay the balance or be liable for any deficiency after the sale. As the reason for the repossession was a lack of cash on our part, we were unable to pay the blance and the car was sold.

About a month ago we received a letter stating that the car had been sold and we still owed around $4200. A week later we received a phone call from a "National Asset Recovery" who said they represented the bank. The implication was they were a part of the bank who held the note on the car. She even said they were the same thing. I believe they are a collection agency.

I told them I disputed the balance owed and was preparing a letter to outline this. Thier original letter mentioned they needed any dispute in writing. The lady on the phone then tried to negotiate with me and asked what I believed was owed. She threw out $4000 and then $3700. As I had not completed my letter, I told her I was not sure. She then said would I accept $3500. I told her I needed to discuss the matter with my wife and we would get back to her.

She called back this morning and wanted to know what I was going to do with the debt. She said we had not called her back (true but it had been less than a week) and that what I was doing was stealing from the bank.

She said that she needed something to stop legal proceedings and suggested $300. After a little debate I told her all we had was $100 and gave her a check over the phone.

After I hung up, my wife said I made a mistake and that they would now seize our bank account. Can they do this? We have more than $100 in there but it is mortgage money.

What options do we have? It sure seemed they were ready to negoiate. I believe I owe them around $750 which is a far cry from the low of $3500 they suggested. I base my figure on what we paid, reasonable value of the car, and deducting some insurance they had rolled into the loan.

I am currently out of work on disability and told them this. I should be returned to work within 2 weeks. We live month to month and would have a hard time even comming up with $100/month for them.

Any advice will be appreciated.


Senior Member
Your wife was right, you made a major mistake in giving a collection agency your banking information !! Never, ever, do this, its like giving them free access to your money ! Its also not a good idea to ever pay a collection agency with a personal check, again, you're giving them banking info you really don't want them to have. If I were you, I'd open a new account in a new bank and close the old one.

That being said, the only way they could freeze your account would be for them to get a judgment against you, and you would have plenty of notice if you were to be sued. However, CA's are unscupulous, thieving, scumbags, and most of them will lie, lie, lie, and take money from your account w/o authorization.. it has happened. ANY negotiations with a collection agency should be done in writing only, and you mail everything certified mail, return receipt requested. They will very conveniently 'forget' about any 'arrangement' you make over the phone.

As far as the deficiency is concerned, I don't know how you're going to dispute it with a value of $750. The bank took the car and sold it at an auction, which NEVER brings anywhere near what the car is worth or what's owed on it. The subtract what they got at the auction from what you owed, tack on repo fees, etc. and you are then liable for what's left over, you don't have much room for argument unless you can prove the amount you owed was less than the bank claimed.

The CA's threats about legal proceedings are most likely nothing more than hot air at this stage of the game. They want money, NOW, and they'll make threats (most are illegal !!) to scare you into paying.. which she did and you gave her your bank info !

Send the CA a cease and desist letter, tell them they are not to contact you by phone about the debt, ONLY by mail. By law they must comply. You can also draft up a payment plan that YOU can afford and send that to them.. they'll probably blow you off on it, but be persistent. You could also offer a settlement amount, just be aware that anything over $600 of 'cancelled' debt from a settlement is considered taxable income by the IRS and you'd be required to put that 'income' on your tax return next year.

You also need to read up on the Fair Debt Collections Practices Act (FDCPA) and learn your rights when dealing with CA's.. they ARE limited in what they can do or say. Go to www.ftc.gov, go to Consumer Protection, then Credit, and find the FDCPA articles.

If you need a sample Cease and Desist letter, there are several places where you can get them: www.creditnet.com is the best, they're under 'Discussions'.

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