|
The Chances of yours to rely on your vehicle to get you wherever you need to go and whenever you need to go whether it’s to work, school, the grocery store or the soccer field. But if you’re late with your car payments, if you don’t have ample auto insurance, your vehicle could be taken away from you. When you finance or lease a vehicle, your creditor or lessor has significant rights that end once you’ve paid off your loan or lease obligation. These rights are established by the contract you signed and the law of your state. For paradigm, if you don’t make timely payments on the vehicle, your creditor may have the right to “repossess” — or take back your car without going to court or warning you in advance. Your creditor also may be able to sell your contract to a third party, called an assignee, who may have the same right to seize the car as the original creditor. You should know that your creditor’s rights may be limited. Some states impose rules about how your creditor may repossess the vehicle and resell it to reduce or eliminate your debt. Creditors that violate any rules may lose other rights against you, or have to pay you damages. Paying the Deficiency in some cases Any difference between what you owe on your contract (plus certain expenses) and what your creditor gets for reselling the vehicle is called a “deficiency.” For example, if you owe $1000 on the car and your creditor sells it for $750, the deficiency is $250 plus any other fees you owe under the contract. Those might include fees related to the repossession and early termination of your lease or early payoff of your financing. In most states, your creditor is allowed to sue you for a deficiency judgment to collect the remaining amount owed as long as it followed the proper procedures for repossession and sale. Similarly, your creditor must pay you if there are surplus funds after the sale proceeds are applied to the outstanding contract obligation and related expenses, but this situation is less common. You may have a legal defense against a deficiency judgment if, for example, your creditor breached the peace when seizing the vehicle, failed to sell the car in a commercially reasonable manner, or waited too long before suing you. An attorney will be able to tell you whether you have grounds to contest a deficiency judgment. discussion with Your Creditor or Lessor It’s easier to try to prevent vehicle repossession from taking place than to dispute it after the fact. Contact your creditor as soon as you realize you will be late with a payment. Many creditors work with consumers they believe will be able to pay soon, even if slightly late. You may be able to negotiate a delay in your payment or a revised schedule of payments. If you can reach an agreement to change your original contract, get it in writing to avoid questions later. However, your creditor or lessor may refuse to accept late payments or make other changes in your contract — and may demand that you return the car. If you agree to a “voluntary repossession,” you may reduce your creditor’s expenses, which you would be responsible for paying. But even if you return the car voluntarily, you still are responsible for paying any deficiency on your contract, and your creditor still may enter the late payments or repossession on your credit report. If you are facing, bankruptcy, ask an attorney for information about your rights to the vehicle during that process.
Related Articles -
kyc, loan verification, credit verification, know your client(kyc), credit/loan verification, financial investigation, fraud management, document chec,
|
