If you are behind on your vehicle payments, your creditor has the right to repossess the vehicle. This means the creditor can take the vehicle away from you. A “voluntary repossession” is when you choose to give the vehicle back to your creditor. An “involuntary repossession” is when the finance company or creditor takes the vehicle from you.
Repossession of the vehicle may not take care of all the debt you owe to the creditor. Sometimes, creditors sell the repossessed vehicles at auctions. If the vehicle is sold for less than the amount you owe on the loan, you will have to pay the difference. The creditor will give you a “deficiency balance.” The “deficiency balance” is the amount you still owe after the money from the sale is applied to your total loan balance plus reasonable repossession fees. If you don’t pay it, you may be sued on a “deficiency balance.” If you have questions about vehicle repossessions, please call the Legal Services for the Elderly Helpline at 1-800-750-5353.
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