This happened about 13 years ago and I'm still struggling to pay it. How can I avoid court and tell them about the law about selling for fair value? I am paying them $25 a month now and I'm afraid they will take me to court and get a judgement for more a month that I can't afford, but I know I'm right about how they sold the car for much less than it was worth.
Make an offer to settle for a lump sum of cash or look at bankruptcy. Frankly, I am surprised that the creditor has accepted payments for this long because the interest accruing on the debt is probably a lot more than the amount you say you are paying. In repo situations, vehicles are sold at a dealers only auction for about half of what they might sell for on a car lot. Hope this perspective helps!
You need to set an appointment with an attorney to review the paperwork. The deficiency between the loan and the auctioned price is a normal occurrence, and as long as the auction was conducted in an open and commercially reasonable manner, it is perfectly legitimate. You should have a lawyer verify the debt is still collectible, check for any violations of collections law and assess if you are a good candidate for a bankruptcy. You can also look at a lump sum settlement of the balance.
You can find a local attorney here on or through NACA, NACBA or the MA State Bar.
I'm not aware of what kind of law would require the bank to sell the car for the amount you think they should. Typically repossessed cars are sold at auction, so the bank has limited control over how much they get for them. The law allows for them to collect the deficiency from you, if they sell it for less than what you owe.
You're right in thinking that they can take you to court over this debt. You can try to negotiate with them, but a better option might be to file bankruptcy.
Depending on whether you have other debts in addition to the deficiency on the auto loan, you may qualify to simply file a chapter 7 bankruptcy and eliminate this debt along with all of your other unsecured debt. You may also be able to make one-time reduced offer. The biggest concern I have is whether the $25 a month you have been paying is less then the interest, which in Massachusetts is 12% a year, and where you very well may owe more now then you did to start with. You can contact any bankruptcy attorney who responds to this question, or use the find lawyer tool on to locate a lawyer near you.
You may want to speak with a bankruptcy attorney, but bankruptcy may not make sense if your only debt is the balance of $8,000 or less. In a situation like this, you may actually save money by hiring an attorney. Instead of paying $25.00 per month - which is probably not even paying the interest - you may need to think more strategically about this debt. To answer question, the only way to get out from under this debt is to pay the full amount or some negotiated lesser amount. Good luck!
I agree with the other attorneys posting here. You can either offer to settle the debt for a lump sum or consider a bankruptcy. If you have other debts that are weighing you down, a chapter 7 is probably the best idea. The downside is that a bankruptcy costs more than $25 per month, but if that's what you've been paying, you're never going to get out of this debt, the interest alone is going to make this debt follow you forever.
