what can happen

[kaeyreed]

What is the name of your state? CA

Back in April we bought a new, used car. Since then we have had some financial issues and we cannot afford our car any longer. We owe more than the car is worth and are considering voluntarily surrending it to finance company. We realize that this will still go down as repo. However, what can we expect legally after that? What rights do we have after surrendering?

 

[JETX]

However, what can we expect legally after that?

You can expect, at the least, a demand by the creditor for the amount that you still owe after they sell the car at auction. This could likely then lead to a judgment against you. If that happens, you can expect garnishments and seizure/sale of your non-exempt assets, if any.

What rights do we have after surrendering?

Not much.

One suggestion... if you give the vehicle back, it will be sold at auction where it MIGHT get 10% of its value. You will still be responsible for any amount left unpaid.
Why not sell it yourself, even at a loss. The loss will be far less than the shortage (called 'deficiency') you will have if it is sold at auction.

 

[kaeyreed]

if vehicle is sold doesn't it have to be sold at a commercially reasonable sale or rate, would only 10% of it's value be considered unreasonable?

 

[JETX]

if vehicle is sold doesn't it have to be sold at a commercially reasonable sale or rate, would only 10% of it's value be considered unreasonable?

Nope. It only has to be sold at a public auction and though it could go for higher, depending on condition, year, mileage, etc., 10% is not unrealistic. Have you ever been to an auto auction???

Bottom line.... you will clearly get more for the vehicle if you do a private sale... or even get wholesale from a dealer.

 

[markf2145]

Take it to a CARMAX dealer, I am in Illinois but I did look on their web site and they do list some locations in California, I have no idea how close/far these are from you. CARMAX will give you a written offer to purchase your vehicle after they inspect it, this offer is good for 7 days I believe.

Obviously you wont get from them what you might get selling it on a retail level to a private party, but it might just be something that may help you out in your current situation.

 

[jpritchett81]

Take it to a CARMAX dealer, I am in Illinois but I did look on their web site and they do list some locations in California, I have no idea how close/far these are from you. CARMAX will give you a written offer to purchase your vehicle after they inspect it, this offer is good for 7 days I believe.

Obviously you wont get from them what you might get selling it on a retail level to a private party, but it might just be something that may help you out in your current situation.

Carmax gives you 7 days or 300 miles.....whichever comes first. They are pretty reasonable.

 

[kaeyreed]

what rules do repossessers have to follow!

I am in California, are the rules of repossession the same for a voluntary repossession and an involuntary repossession. And what rules do the banks have to follow. Are there notices that we should recieve, I am just trying to protect our rights. Lost job and lost car!

 

[lwpat]

The downside of a repossession, whether voluntary or involuntary, is that it will stay on your credit report for seven years or even longer if they illegally re-age the debt. You can be sure that the collection agencies will do this and it may even be reported as two or three separate defaults. This means that it will be virtually impossible for you to get any type of loan during that period. Unless it is a large sum they probably will not go the judgement route but will simply continue to harass you, and harass you, and harass you.

Your best option is to follow the advice to sell the car privately and somehow come up with the money to pay the remainder of the loan.

 

[msldystrkr]

I did want to add my 2 cents... I have read, but can not find at the moment, about a case pending in FL where the creditor was sued for not doing their due dillegence in the selling of the car. Something about the fair market value, not auction value where everyone knows you will get nothing... I will keep looking for this...

 

[kaeyreed]

case in Florida

Thank you I would be very interested in reading how this turns out. Do you think the same would apply for California?

 

[Who's Liable?]

If you bought the car thru a dealership, or a mom-n-pop shop, they would've put a lein on the vehicle. Look at your title and see if there is any company under Leins... If there is a Lein holder, you will not be able to sell the vehicle privately...

 

[JETX]

If you bought the car thru a dealership, or a mom-n-pop shop, they would've put a lein on the vehicle. Look at your title and see if there is any company under Leins... If there is a Lein holder, you will not be able to sell the vehicle privately...

And of course, that is not true. Cars with liens are sold all the time.... the seller simply has to pay off the lien first and get a negotiable title.

 

[JETX]

I have read, but can not find at the moment, about a case pending in FL where the creditor was sued for not doing their due dillegence in the selling of the car. Something about the fair market value, not auction value where everyone knows you will get nothing... I will keep looking for this...

I think you are confused about the requirement that some states have that place certain requirements on repo sales. Such as that they must be 'arm length' (not sold to employees or brother-in-laws at artificially low prices, etc.) and that the debtor must be noticed of the sale date/time/location.
As long as the creditor complies with the states laws.... there wouldn't be a problem.

 

[Who's Liable?]

JETX is correct... You have to take care of the lein first... So in essence, you have to pay the lein holder what you owe them, they in turn will sign themselves off the lein, and you can sell the vehicle after that...

What I meant in my previous post is, you cannot sell the vehicle without taking care of the lein first...