Repossession
- Car Repossessions
Repossession:
Simply put, if you don't pay the bill on your car the bank is going to
come and pick the car up whether you like it or not. It is a one time
occurrence (per car) and usually leaves you with a deficiency after the
bank has sold the car. For example, say you bought a brand new $40,000
BMW on a $10,000 a year salary. You quickly realized you couldn't pay
for the car so you stopped making the $700 monthly payment. The bank sees
this and decides they need to get the car back and try and recoup some
money from it, so they repossess it in the middle of the night. Three
weeks later the bank is able to resell the car for $30,000, leaving a
$10,000 "deficiency" between the amount you owed and the amount
they sold it for. You are responsible for the $10,000 deficiency, and
until you pay it back it will stay on your credit report (unless the bank
doesn't renew the listing, which is rare). Repossessions can happen with
other items as well, including but not limited to: furniture, appliances,
machinery, business equiptment, motorcycles, snowmobiles, ect..
Solution:
If you've bought a car that you soon realized you couldn't afford, the
first step would be to try and sell the car on your own. Banks are terrible
at selling cars and often sell them for much less than you could sell
it for. If you already have a repossession on your credit report with
a deficiency, then try to save a little bit of money and talk to the bank
about settling the debt you owe for a lesser amount. If the bank is unwilling
to settle, talk to a debt settlement company or a lawyer about what steps
they could assist you with. Usually you can settle old debt for 10-40%
of what you owe.
Untitled Document
What Causes
Bad Credit:
Inquiries
Late Payments
Charge
Offs
Repossession
Foreclosure
Judgements
Bankruptcy
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