AustinC

Car Loan in Collections...

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Hello,

I was late on my car loan payments and when I finally was able to pay it I was told that it was in the collections dept at Ford. I contacted them and I am still currently making monthly payments directly to the collections dept. However, can the still take my car even though I am paying every month being that it is technically in collections? Also, What if I stop paying will they repo the car or does it just stay on my credit as a collection? I currently live in another state from where I purchased the car. Just trying to know all the options, legalities, and recourse...

Thanks

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2 hours ago, AustinC said:

However, can the still take my car even though I am paying every month being that it is technically in collections?

If the account is current:  no.  If you still have money owed yes, it is subject to repossession.

2 hours ago, AustinC said:

Also, What if I stop paying will they repo the car or does it just stay on my credit as a collection?

If they do repossess it the status will change from collections to "repossessed."

 

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Do you know if the contract has an acceleration clause or not? If it does, then they technically can repo the car if they decided to use that clause. If the contract does not have such as clause and you are current, including paying ALL late fees and other fees, then they probably cannot repo the car because they allowed you to cure the default. Being that this is Ford Motor Credit, they are using computers to determine their next course of action and most employees probably do not or cannot use any thought or common sense so who knows what will happen. Also, even if you live is a different state from where you purchased the car, that simply means the repo laws where you live apply. If they know where you live (remember, the copied you DL when you purchased the car and signed the papers), they can find the car. I am sure they deal with people who live in a state different from the purchase state every day.

As Clydesmom has said, if they do a repo then it will change on your credit report as a repo rather than a collection which is worse.

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Thank you for your input! I am current on my payments to them, therefore paying as agreed. However, it is charged off and in collections for the remaining balance on the loan. I am guessing as long as I pay as agreed they will not repo it.

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Maybe you can answer this... Since the car is in collections, am I still required to carry full coverage insurance? I am just trying to find a way to make it cheaper. This car is so damn expensive, I am upside down on it, it is not even worth the value anymore and I am completely frustrated with myself that I even got myself in this situation. 

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I do not want to say yes or no on whether they will repo the car because there are many factors in that which I am not privy to so I may give you the wrong answer.

The first part involves the contract. If there is an acceleration clause in the contract and Ford Motor Credit exercised that, the contract is still in default (because the only way to cure the contract would be to pay off the full amount due on the contract) and thus, the car can still be repo'd at any time. If there is no acceleration clause, then you probably cured the default by bringing the contract current and the car probably will not be repo'd.

The 2nd part is how the finance company will act. Since this is Ford Motor Credit, more likely, everyone follows what the computer tells them to do and the computer makes all the decisions. This means that if the contract is such that a repo can be done, the computer will eventually tell someone to send out an order for repo, even if it does not make any sense based on all the facts of the account and situation. Then again, the computer may realize that you are upside down pretty bad and the algorithm may tell the computer not to bother with a repo because it would be a losing proposition at this point.

To answer you last questions, you must keep full insurance coverage on the vehicle at all time until the contract has ended (either by payoff or repo due to default). If you don't do it, the finance company can put their own insurance on and charge you for it and that insurance can be up to 800% more expensive than the policy you have. That is also a default of the contract which can set you up for a repo.

Depending on how upside down you are in the loan, you might be able to borrow the difference from a credit union or local bank. If you can, then you can sell this car, pay off the difference to get title for the buyer and then pay off the personal loan which will be cheaper. Since this is Ford Motor Credit, they will never admit that the part you are upside down on is an unsecured loan so you cannot go to them. If you cannot get the upside down amount, you might be stuck until you pay down the loan.

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