Voluntary Repo

[scooby]

My boyfriend recently had his car repoed by the loan company. He stopped paying on the car in February and called and sent letter to loan company stating that he could no longer afford the car. He took the car to the nearest car dealership for the repo guy to pick it up. Two weeks after contacting loan company, they sent repo guy to pick up car.

Even though this was a voluntary repo, was he supposed to receive a letter stating that his car is being repoed? He did not receive any correspondence stating this.

Two more weeks has passed by since car was picked up. Will he only receive letter after the car has been auctioned? He owed a huge amount more than the car was worth.

Would appreciate hearing from anyone who has gone through voluntary repo so that he will know what to expect.

Thanks.

[myscoresawful]

I hate to say this, but I think he lost a lot of those "rights" when he did the voluntary repo.

For starters, the original letter the OC sends, is basically to allow a person to redeem a car before it is auctioned off.

A judge would probably ask why your bf why he would need that letter when he had sent a letter admitting he could no longer afford it.

The second letter is to let you know what they did with the car and how much the defc is for.

Again, I believe a person waives some of their rights when they do a voluntary repo. If I am wrong, there are auto repo gurus here that will set me straight..

(If I am not mistaken, there is even a difference somehow in getting sued for that def, depending on whether or not it was voluntary or not)

[hiblues]

You asked...

"What can I expect?".....

You can expect that the OC wants the rest of their money owed including repo fees etc.

You can expect it to go to collections if you don't pay.

You can expect that the CA may sue you for it... and get a Judgment.

If all that happens, you can expect 3 negative TLs for this one account...

1. OC showing Repo

2. Collection of the balance

3. Judgement

So, what to do now?

Better to have this one negative TL rather than have it multiply to 3.

Do your best to work out some kind of payment arrangment with the OC

so it doesn't go to collections.

If you could make hefty payments they may be negotiable on the

remaining balance.... but

If you had extra cash, I'm sure the car wouldn't have been repo'd.

So, agree to make small payments per pay period

and try to have them agree to NOT add anymore interest and have them report your

payments to the CRA... that way you can show a

positive payment history and the repo over time will

have less effect on your CR oh and yea, DO AS YOU AGREED.

at the end of the payments you could send a nice GW letter

and who knows they may delete it from your CR becuase

you made good.

[CleverCynic]

Just a rant about this auctioning thing.... I don't see how it's in anyone's interest or should be legal. The car should go back on the dealer's lot to be purchased at an inflated price with interest the same way you found it... who knows you might get real close to what you owed that way.

Plus.. it's one thing to consider paying an old charge-off for things you actually bought and owe... but I couldn't conceive of paying thousands for something you don't have and they got back. Too bad they chose to auction it off at a fraction of the cost at your expense! BURN!

[Big Time]

Even the inflated price may not cover the amount he owed.

They still have to send you notice of how much they sold it for at auction, and if they sold it way cheaper than it is even worth wholesale, then try to collect the balance, that could be used as a cause of action to give him some leverage.

[scooby]

You asked...

Do your best to work out some kind of payment arrangment with the OC

so it doesn't go to collections.

.

He is going to try to work out payment arrangement with loan company after he receives the letter to see what balance is remaining on account. What if the balance is way too high, which it probably will be, is there anyway you can negotiate with loan company on reducing the balance? Or can you only negotiate payments/balance once it goes to Collections?

[gypsie]

He is going to try to work out payment arrangement with loan company after he receives the letter to see what balance is remaining on account. What if the balance is way too high, which it probably will be, is there anyway you can negotiate with loan company on reducing the balance? Or can you only negotiate payments/balance once it goes to Collections?

I had a "voluntary" repo with Ford Motor Credit, and yes- I was able to negociate the balance after the auction.

They told me I could make monthly payments until I paid just over $8000.00 (the difference after the auction) or I could make 1 large payment of around $5000.00 and that would "settle" the balance.

They were actually very nice about it, and had other options if I needed them. They basically just wanted their money and were willing to negociate without the expense of a CA or court.

good luck!

[scooby]

I had a "voluntary" repo with Ford Motor Credit, and yes- I was able to negociate the balance after the auction.

They told me I could make monthly payments until I paid just over $8000.00 (the difference after the auction) or I could make 1 large payment of around $5000.00 and that would "settle" the balance.

good luck!

This is good news to hear. How long did Ford Motor Credit give you to pay the balance? I wonder if a credit unions would be as cooperative.

[gypsie]

Sorry, I dont' remember all of the options they offered- my repo was in 04

I opted for the pay $5000 and be done with it. Fortunately, my DH had a Line of credit with the bank and got the 5 grand for me. ( we had just gotten married- way to start off a marriage!)

However, they discussed several options with different settlement amounts- I think one was maybe for $2500.00 now and then payments around $450.00/month (for about 6 or 7 months)- I was considering that one. Because at the time I could afford that payment and pick up the payments on my DH's car ( he was going to buy a new one for himself) and it was still cheaper than the original car payment for the mustang that I "voluntarily" had repo'd.

I still kick myself for buying such an expense car.

IMO- CU's are easier to work with- if he's willing to work with them to pay, then more than likely they will work out something that he can afford.

And- like hiblues said- it's much better to have one negative TL from the experience than 2 or 3

[stancil1]

The benefit of having it go to auction is that you actually get more value out of the vehicle believe it or not. If the vehicle, when repoed, has over a 100k miles on it or is in bad condition (blown motor or transmission etc.) it can't be sold on the lot without having more money dumped into it for reconditioning, or, in the case of high milage, it can't be sold on the lot period because of the liability of mechanical failure to the potential lender. Here's one case scenario, You have a crooked car dealer ( we all know though that they don't exist so this is only for demonstration purposes) that has a nephew that needs a car. They repo a beautiful 2004 Camaro Z28 that a customer owes $14,000.00 on but instead of sending it to an auction and getting 9 or 10k for it which leaves an aprox. 4 or 5K balance owed by the original customer, the dealer sales it to his nephew for $1000 and claims that's all he could get for the car which leaves the original customer owing a $13K balance. At least at auction they are forced to take the highest bid of individuals competing on that particular vehicle.

Hope this helps

D

[hiblues]

Instead of waiting for the letter, why not be proactive and

contact them first?

[CleverCynic]

I see that benefit in some cases. In mine, I had a new 2001 Ford Explorer repoed in 2002 with 38K miles. My balance was 22k at repo and balance now is 16k which means someone got it for 3k more than my down payment free and clear!

[scooby]

The benefit of having it go to auction is that you actually get more value out of the vehicle believe it or not. If the vehicle, when repoed, has over a 100k miles on it or is in bad condition (blown motor or transmission etc.) it can't be sold on the lot without having more money dumped into it for reconditioning, or, in the case of high milage, it can't be sold on the lot period because of the liability of mechanical failure to the potential lender. Here's one case scenario, You have a crooked car dealer ( we all know though that they don't exist so this is only for demonstration purposes) that has a nephew that needs a car. They repo a beautiful 2004 Camaro Z28 that a customer owes $14,000.00 on but instead of sending it to an auction and getting 9 or 10k for it which leaves an aprox. 4 or 5K balance owed by the original customer, the dealer sales it to his nephew for $1000 and claims that's all he could get for the car which leaves the original customer owing a $13K balance. At least at auction they are forced to take the highest bid of individuals competing on that particular vehicle.

Hope this helps

D

My boyfriend received a letter about two weeks ago from the credit union. Stated they will sell vehicle at a private sale. The sale could include a lease or license. What does this mean?

At the end of the letter in bold they wrote: You may be subject to suit and liability if the amount obtained upon disposition of the vehicle is insufficient to pay the contract balance and any other amounts due. Upon disposition of the vehicle you will be liable for any such deficiency balance plus interest at thecontract rate or at the legal rate of interest (civil code 3289). If there is no contract rate of interest, from the date of disposition of vehicle to teh date of entry of judgement against you. The contract rate is 13% per annum.

My boyfriend's loan was $29,000 and trade-in value on car was only probably $13,000. Car had low miles -- under 10,000 and in excellent condition. I know this doesn't make a difference because even though in good condition it won't bring much during auction or private sale.

When he gets the second letter, will that state he is being sued automatically? Or is not person only sued if they refuse to work out payment agreements. He willing to work out payment agreements after he finds out what balance will be, because he doesn't want his check garnished.

Please let us know what to expect. thanks.

[jlt071997]

If bf "voluntarily" gave up car, that will show as "voluntarily repossessed" on credit report. Believe it or not there is a difference. There are guidelines the financial institution has to follow on sale of repos. They have to sell car for "fair" market value, at least. Go online to nada.com and pull what the vehicle is worth. That will give you an idea.

Example:vehicle value lists for $10,000, they can't sell it for $100.00.

After sell of vehicle the financial institution legally has to send letter stating what the vehicle sold for.

Example: Dear Mr. You Owe Us Money, the vehicle xxx sold at private auction for $xxx.xx which was applied to your balance. There now remains a balance of $xxx.xx including repo fees, late fees, interest fees, repairs or cleaning fees.

They will then give your bf a time frame as to contact them or pay balance in full. Now, is when he needs to contact them to make payment arrangements, BEFORE they send to attorney for judgment.

Hope that helps. One more thing check to see if they have added forced place insurance (whenever he might have lost insurance coverage), or any other rebates you could get back, example: any added insurance, disability, extended warranty, etc. Those could also be rebated and taken off the balance

[scooby]

My boyfriend received letter last week stating what the deficiency balance would be. He is left owing $17,000. So, he called to try to work out payment arrangements because he did not want the account turned over to a collection agency. The CU quoted $590 month and he said it was too high. Then my boyfriend offered $200 month but that was too low. Finally, they agreed on price of $293 month.

The company sent him an open end loan agreement to sign. One sentence stood out in particular. "I fully understand and fully accept that should I fail to pay all or part of the loan back under its terms that I risk losing assets including my home."

If my boyfriend happened to default on this agreement to repay the loan, how can the CU take his house if he is making is mortgage payments on time? Can they do that?

Thanks for everyone's input on this thread. This board has been very helpful.

[elyse449]

My boyfriend received letter last week stating what the deficiency balance would be. He is left owing $17,000. So, he called to try to work out payment arrangements because he did not want the account turned over to a collection agency. The CU quoted $590 month and he said it was too high. Then my boyfriend offered $200 month but that was too low. Finally, they agreed on price of $293 month.

The company sent him an open end loan agreement to sign. One sentence stood out in particular. "I fully understand and fully accept that should I fail to pay all or part of the loan back under its terms that I risk losing assets including my home."

If my boyfriend happened to default on this agreement to repay the loan, how can the CU take his house if he is making is mortgage payments on time? Can they do that?

Thanks for everyone's input on this thread. This board has been very helpful.

Is the home financed by the credit union??

If it were me, I wouldn't sign that dam* form! Sorry. Too much risk, and was the condition of sale ever requested by him because 17,000 left owing is a SUBSTANTIAL amount! Does he have other debt?

Elyse

[elyse449]

Just a rant about this auctioning thing.... I don't see how it's in anyone's interest or should be legal. The car should go back on the dealer's lot to be purchased at an inflated price with interest the same way you found it... who knows you might get real close to what you owed that way.

Plus.. it's one thing to consider paying an old charge-off for things you actually bought and owe... but I couldn't conceive of paying thousands for something you don't have and they got back. Too bad they chose to auction it off at a fraction of the cost at your expense! BURN!

HERE, HERE!! I couldn't agree more completely. On some level, they are choosing to take less than is owed...ya know what I always wondered? LOL...what if you had a "friend" go to the auction and buy it back for ya for 3,000 or whatever...I mean, that's assuming you could pull that money together of course...but still. Something about the way they repo does seem faulty. Than again, I guess as consumers we could try to find someone to take over payments to...or sell it ourselves. But I do agree..why not put it back on a friggin' car lot.

Elyse

[scooby]

Is the home financed by the credit union??

If it were me, I wouldn't sign that dam* form! Sorry. Too much risk, and was the condition of sale ever requested by him because 17,000 left owing is a SUBSTANTIAL amount! Does he have other debt?

Elyse

The house is not financed by the CU. However, he did have a signature loan with the CU and they agreed to combine the two. They also sent him something called a Work Out Loan Application that he has to list all assets and every bill he owes even car insurance premiums.

Maybe he should talk to a lawyer before he signs? He had thought about filing bankruptcy but he had to file Chap 7 in November 2000 because of drop in income. So, he would be not eligible to file again until November 2008 is that correct? Are there any circumstances that would allow him to file before that time? He is really overloaded with bills.

Thanks for your time.

[Sport59]

Never ever let your car get repo'ed or agree to a voluntary repo. You are better off trying to sell the car yourself and then ask the lender to work with you in paying off any balance due. If you allow them to take it back and sell it at a private auction, you have no control over the resale value of the car. By selling it yourself, you have a better chance of obtaining a higher price and avoid having to pay repossession fees and costs associated therewith. No one is going to look out for your interest better than you, so don't rely on the lender or their people to do the right thing. If you find a seller and the bank refuses to deal with you and then later sells the car at a private sale for less than what you were offered, at least you can defend any deficiency action down the road by showing that your sale price was the actual fmv for the car and that the bank is not entitled to a deficiency judgment for the balance of the loan because their sale was not commercially reasonable. That being said, tell your boyfriend to talk to an attorney dealing with consumer credit/bankruptcy matters and find out his options. Seems like he is jumping out of the pan and into the fire by signing a loan agreement that puts his home at risk -- He may be turning an unsecured debt into a secured debt.