Many times people finance a brand-new or used car and they keep up the payments for a while. But then, life happens: the loss of a job or a medical emergency and suddenly they realize that they are in over their heads.
They can no longer make the car payments or their disappointed by the vehicle’s performance. So they simply bring the car back to the dealership and walk away from it. At that point they think they’ve done the right, and responsible thing by returning the vehicle and all will be forgiven. Right? Unfortunately the answer is no. Many people are surprised to find out that they have a judgment on the credit reports stemming from this entire scenario. This results in a nightmare of a situation which no one could have predicted
If you financed a vehicle, and then drop it off at the dealership, or return it after paying it for only a couple of years, that is known as a voluntary repossession. The key word here is repossession. If you owe a balance on the car note and stop paying the balance, the bank will consider it a repossession whether they sent a tow truck for your car, or whether you turned in the car at the dealership.
The financial impact of a voluntary repossession is the same as a forced repossession. The bank will sell the car at a wholesale auction and force you to pay the difference between what is owed and what they sold it for. If you don’t, or can’t pay, the banks will usually sue you, try to obtain a default judgment against you. Once that happens then they will enforce the judgment by freezing your bank accounts, freezing a safe deposit box, orgarnishing your wages, salary, tips, paycheck, and other income. The judgment will also affect your credit rating as it will usually appear on your credit report.
If you are stuck in a car note that you cannot afford, you should speak with a legal professional prior to returning the vehicle. Please feel free to contact the law office of Abel Pierre at 212-766-3323. You can always call us or send us an email and we will evaluate your scenario and propose you with strategic solutions right away.