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We hope the articles below help you understand your rights as a consumer. You can scroll through the titles, or sort by Practice Area or Topic. You can also use the search feature to locate information by keyword.

Flitter Milz represents people with a variety of problems involving consumer credit and collections. If you have a particular question or believe your consumer rights have been violated, Contact Us for a no cost consultation.

The Lender Sold My Repossessed Car. Why am I being sued?

Car auction car lot

Perhaps the worst thing about having your car repossessed is that even after your vehicle is gone, the lender may not be done with you.

In some cases, lenders hire collectors or file lawsuits against borrowers to recoup what they’re owed. In this blog post, we’ll look at steps lenders may take after repossessing a car. 

Continue reading The Lender Sold My Repossessed Car. Why am I being sued?

Car Repossessed? Now Getting Sued by My Auto Lender

Lawsuit with car repossession

Perhaps the worst thing about having your car repossessed is that even after your vehicle is gone, your lender may not be done with you.

In some cases, lenders may file lawsuits against borrowers to recoup what they’re owed. In this blog post, we’ll look at what’s involved with being sued after a  car repossession.

Continue reading Car Repossessed? Now Getting Sued by My Auto Lender

Do I Still Owe Money After My Car was Repossessed?

If you’re going through financial hardship or a difficult life event, it can be challenging to keep up with your car loan payments. Your vehicle is collateral, or your pledge to a lender that you’ll repay the loan. If you default on the terms of your loan agreement, the lender may choose to repossess your vehicle. They’re not required to contact you before the repossession.

If your car was recently repossessed, you may be wondering what happens next. Do you still owe the payments that you missed on your loan? Do you still owe the full balance after your car is sold?

Continue reading Do I Still Owe Money After My Car was Repossessed?

What are Creditors Able to Repossess?

It may seem as if a creditor has all the power in a loan agreement, but there are limitations as to what a creditor can and can’t take from you if you fall behind on loan payments.

What Can Lenders Repossess? 

In some loan agreements, a possession or property is listed as collateral. Collateral means that the borrower has pledged something to serve as protection for the lender in the event that there is a default.  For example, in a case where the borrower fails to make payments in full and on time under the agreement’s terms, the collateral can be repossesed.

Vehicles are considered collateral in auto loan agreements. If the borrower falls behind on payments, the lender maintains the right to repossess the vehicle, usually without any prior notice. If the vehicle is sold for less than the remaining loan balance, the borrower may still be responsible for paying the outstanding amount.

The same is true for homes. If a borrower doesn’t make timely mortgage payments, the lender can repossess the home. This is known as foreclosure. The home is then typically sold as a means of recovering as much of the remaining loan balance as possible.

Rent-to-own items can also be repossessed. This could include items like furniture or appliances that were rented with the option of buying.

What Can’t Lenders Repossess?

Lenders can’t repossess property that isn’t specifically listed as collateral in the terms of the loan agreement. Credit card purchases also cannot be repossessed if you fall behind on payments. And even if some property is listed as collateral in the agreement, a contract can be void if it doesn’t comply with state legal requirements. It’s also important to keep in mind that a creditor can sue you in court to recover money that you owe if the loan agreement doesn’t list collateral.

Seek Legal Help

Flitter Milz is a nationally recognized consumer protection law firm that represents victims of improper vehicle repossessions. If you think your consumer rights may have been violated by the lender or repo agent, contact us for a no cost consultation — whether or not you fell behind on your auto loan payments.

What to Do If You’re Sued for a Car Loan Deficiency

Vehicle repossessions are worrisome and stressful enough, but what happens when the lender files a lawsuit against you after the repossession? Learn about what a deficiency lawsuit is, and what you should do if you’re being sued.

Auto Loan Deficiencies

When auto loan lenders repossess a car, truck, motorcycle, boat, or other vehicle, they sometimes sue the borrower for the deficiency. The vehicle is considered collateral according to the loan agreement, but the sale price after repossession often does not meet the total amount owed on the loan. The deficiency is the amount leftover after the lender has sold or auctioned your vehicle.

For example, let’s say you still owe $20,000 on your auto loan and the lender sells or auctions the vehicle for $15,000. The deficiency amount that you are still required to pay would be $5,000.

The Fair Debt Collection Practices Act

The lender may attempt to collect the deficient balance through a collection agency or collection law firm. Collection calls or letters must comply with the Fair Debt Collection Practices Act, the federal law governing debt collection.

A qualified consumer rights attorney can evaluate all collection contact for compliance with the law. If the collector’s tactics have violated the law, you can sue the collector, even though the deficient balance may be owed.

Deficiency Lawsuits

After trying to collect, the lender may initiate a lawsuit to recover the deficiency amount. If you are being sued for a car loan deficiency, do not ignore it.

You still have an obligation to the lender for the deficient balance, even if you don’t have the vehicle. If you disregard a summons to appear in court, the case will proceed without you and a default judgment could be entered against you for the balance of the debt.

Judgments are dangerous. Once the lender gets a deficiency judgment, wages or bank accounts could be garnished, or liens could be placed on personal property.

Seek Legal Help

Contact a consumer rights lawyer to discuss your rights. You may be able to negotiate a settlement or payment plan with the lender.

Remember, repossessions and judgments carry negative weight on your credit report. Your credit score could drop, affecting your ability to obtain a new car loan or any new credit. As well it could impact your existing credit by lowering the amount of available credit or increasing the interest rate.

What Happens if I Default on my Car Loan?

An unexpected occurrence like illness or loss of employment can leave you struggling to pay bills on time. If you are unable to pay your car loan on time, the lender may choose to repossess your vehicle. However, the lender must handle the repossession properly – whether you have fallen behind or not.   

Seek a Deferment Before Default 

Contact your lender before you default to see if a deferment is possible. A deferment will postpone your payments while you catch up with finances. These postponed payments are then applied to the end of the loan.

It is important to receive written confirmation from the lender showing this change to the original loan agreement. Since the terms of the loan have, in effect, been extended, the consumer needs to see how the lender has calculated any additional money to be paid at the end to satisfy the loan.

A deferment will likely still appear on your credit report, but the effect on your credit will not be as negative as a default.

Prepare for Repossession

If your loan is in default, understand that the lender has the right to repossess your vehicle. If you think a repossession is coming:

  • Remove all important car vehicle purchase and loan documents from your vehicle
  • Remove all personal items.
  • Note the current odometer reading 
  • Take photographs of the vehicle – interior and exterior.
  • Request that the lender provide you with a written loan payment history and a payoff figure.

Get Your Vehicle Back

The loan agreement that you sign at the time of purchase details your rights if the vehicle is repossessed. If you financed through the dealership, this document is called the Retail Installment Sales Contract or RISC. It will state whether you must pay off the full balance of the loan, pay only past due payments, and pay for towing and storage fees.

After the repossession, you are entitled to receive a notice that details the terms for you to get your car back. This notice may be called a Notice of Intent to Sell Property. You should receive this notice before the vehicle is sold.  Once the vehicle is sold, the lender is to send a Deficiency Letter which confirms the selling price of the vehicle and any remaining balance owed on the loan.

Seek Legal Assistance

If your vehicle has been repossessed within the past six years, whether you fell behind on payments or not, you may have a case to pursue against the lender for wrongfully repossessing your car, truck, boat, motorcycle or RV. Contact Flitter Milz for a no-cost consultation.