Britt’s Mom 03 asked:
What happens when you let your car be repossessed, but you don’t have the money for the difference in what they sell it for and what you owe?
What happens when you let your car be repossessed, but you don’t have the money for the difference in what they sell it for and what you owe?
you will lose it all
Depending on where you are and the nature of you contract, it will probably be a debt that you owe. It would then go through normal collection procedures, what ever that is in your area. If the amount is not that much, they could just write it off. Sadly, they WILL inform you if you are still considered liable.
The deficiency balance (balance due on the loan after the costs of repo and sale are added in, less the proceeds from the sale) becomes an unsecured debt. The creditor can sue you and get a judgment good for 10 or 20 years.
You should consider filing for bankruptcy.
It goes on your credit report for 7 years. The company can also take you to court for the money that you owe.