QUESTION
What do I do if my car was repossessed and now they want money because they sold it for less than was owed?
Asked on Oct 05th, 2012 on Bankruptcy - California
More details to this question:
No one EVER told me that the car would be auctioned or that I would be responsible for the difference. I've already taken the credit hit for the next 10 years. (I thought it was 7).
6 ANSWERS
A loan deficiency is generally independent from tax consequences. You have a tax liability only if the lender/creditor forgives the liability; any forgiven debt is taxable as income.
Answered on Oct 08th, 2012 at 7:22 PM
Business Law Attorney serving Bingham Farms, MI
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James T. Weiner, P.C.
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Generally You pay the debt.. or you file bankruptcy.. You may try to negotiate the debt down for less than is owed.
Answered on Oct 08th, 2012 at 2:08 PM
Bankruptcy Law Attorney serving Livingston, NJ
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Law Office of Stuart M. Nachbar, P.C.
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In NJ, I would counsel you to file bankruptcy so that you are not responsible for any difference between what it was sold for and what they felt they would get for it.
Answered on Oct 08th, 2012 at 1:52 PM
Probate Attorney serving Green Bay, WI
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Law Office of Peter C. Brehm
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Yes they can do that, as long as it was explained in the agreement you signed when purchasing the car. Its called a deficiency judgment.
Answered on Oct 08th, 2012 at 1:38 PM
Bankruptcy Attorney serving Phoenix, AZ
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Law Office of D. L. Drain, P.A.
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This assumes you are an Arizona resident: A creditor has the right to receive the full amount of their debt. Unfortunately, it is very hard to predict what will be paid at the auction. You are responsible for the balance, plus all their costs. A bad debt stays on your credit report for 7 years. A bankruptcy for 10 years.
Answered on Oct 08th, 2012 at 1:31 PM
Bankruptcy Attorney serving Petaluma, CA
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Law Office of Andrew Kern
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A Chapter 7 bankruptcy will wipe out the debt.
Answered on Oct 08th, 2012 at 12:13 AM