mcdanjw

I have to say I don't have any experience with this kind of thing, so I thought I'd reach out to my cl family.

A friend of mine bought a car on credit.

She was supposed to carry insurance on the car, but flaky as she is, she didn't.

She got in a wreck. She didn't damage the car that bad, but when the bank found out about the wreck, they came and repoed the car.

Now they're telling her she owes 9k on the car.

I mean her credit is already screwed I'm sure.... what should she do?

phipark

Get a brain.

1killercls

She is fucked, any way you slice it.

Linner

Tell her to get on her knees for the loan officer.

chef chris

Well, banks don't normally repo for an accident. So, your friend more than likely didn't make her payments on time or at all.

Secondly, if you don't carry insurance, banks can "force-place" comprehensive insurance which is VERY EXPENSIVE. So, her payment could've doubled just from that.

..What can she do?...Pay what she owes in arrears, get her insurance straightened out & negotiate with the bank so they DON'T report the repo.

Any way you slice it, she has to come up with MONEY & QUICK.

Infiltr8r

oh the bank will come get the car if there is no insurance until they put their insurance on it as previously stated, remember, full coverage is part of the contract, so not having it is breach. at least that's how they do things here in NJ...

JaDia4

thats been in contracts of all 8 of the cars i've financed!

erishe69

That is weird. With every car I have ever bought and the one I have leased, I have had to have proof of insurance before I could even drive it off the lot, or sign for a loan. Maybe that is just a law in some states??? Anyway, it does sounds like she is screwed unless she comes up with cash to straighten things out now.

cusdaddy

Sorry but

I always had to show proof of insurance before I could drive my cars off the lot. Did she just let the insurance drop?

Water-S

yep i agree. unless she can find 9 grand fast she'll never see that car again. also tell her she's STUPID for driving without insurance.
It pisses me off people who drive without insurance because I know they say "i'll drive careful and nothing to worry about" well what happens if it snows and you slide into someone/something. then the person who was hit by the guy with no insurance has to either A) take out of his own personal money and go have the body work done B) file a claim through his insurance which results in insurance going up.

this happened to me. a uninsuraned driver bumped me and tore up my bumper. she said she didn't have insurance. I said look your either paying me cash or i'm calling the cops. well it was a lady that was in her 70 or 80's. I went to her house and she gave me a stack of 20's to go get my car repaired so i couldn't bitch.

chef chris

You need to show proof at a dealership before you drive off, sure...

HOWEVER...if she got her loan through a local bank & signed at a bank branch(which happens every day), the bank has policy as to how long she has to return said proof to them. Where I work is 30 days. There are loan documents the customer signs in which they agree to those terms...30 days, 60 days, deductible amounts, etc.

Either way, she could've HAD insurance and let it laps, which is what usually happens. BUT, like I said, banks won't normally REPO a car because the insurance has lapsed, they'll just tack on the additional fees.

As the bank, you don't want to get sued over something like that, so there were probably other reasons they 'popped' her ride, like NON-PAYMENT. No bank wants the bad press of popping a car over lapsed insurance, whether it was their right to do so or not.

kensteele

My advice to her would be to call it a wash.

Don't pay the 9 grand, let the bank keep the car. And let the repo go on her record. I say this for 5 reasons:

1.If you can get 9 grand, you are better off spending it on something else than trying to get yourself out of trouble that if you forget about it, will just go away anyway. What's another 9grand in debt for what you already can't/won't pay.

2.Now it not the time to be "responsible". Paying up in one day doesn't make up for years of being irresponsible, so why start now?

3.Chances are that repo is going on your record, why fight it? Pay the money and it will still go on your record. And it needs to be on her record, it's only fair. If she has bad credit, cut her losses, start over.

4.No insurance in the past, chances are she doesn't plan to get insurance in the future. Why subject yourself to future possibly bigger liability because you don't want insurance? Let them have the car and you can stay out of trouble without a car...and me and all the other good citizens on the road will be safer with you off the road.

5.She's probably not a bad person and everyone makes mistakes, but the best way to learn the lesson is to let these things stick instead of getting over on them.

5.

CLpower

she can make her payments, that's what she can do

chef chris

I can agree with everything you've said Ken.

But, I have to say, 7 years with a repo on your credit bureau is a big price to pay for some stupidity(young & dumb). Not to mention, if the bank files a civil judgement which stays around much longer. She could be 10 years down the road & think this is all behind her...have a great job, etc...then one day she notices a 15% deduction in her paycheck when the bank attaches her wages.

She can negotiate what shows on her credit bureau if she makes some sort of restitution.

But if she gives up now, she's going to be paying for a long, long time.

SiGGy

I don't, what he is saying is not a smart idea. I don't think Ken sees the long term repercussions of that move.

yes, I agree 100% /w what you have said. That in no way is worth it. Your thoughts are the same as mine when I read that.

I wouldn't do what Ken suggested.

Has she called the bank and tried to workout a solution? Most banks will try and work with you. Sounds like she might have already been blowing them off for awhile...

chef chris

24_karat

bankruptcy??

chef chris

Secured debt. She'd still have to pay the piper.

kensteele

The point I was trying to make is this.

If you are trying to start a new life and do the right thing, make a clean break and go for it. That might include filing bankruptcy.

But if she is like most people and try to negotiate her way out of this, she will be indebt forever.

So she calls the bank and they say "Ok Ms. Smith, you pay us $200 for 15 years, we put the repo on your credit report, and so on." Then since she feels she "got over", somehow she gets another car, no insurance, sporatic car payment with 22% interest, more trouble...for the next 25 to 30 years.

But I don't know this girl. Or her background. The law is the law and the numbers speak to 7 years, 10 years, and that's it. After that either the items are wiped away or they were so long ago, it doesn't matter. I only suggested she start living a cash-only life tomorrow instead of several years down the road. Start the clock now...unless she thinks she'll win the lottery next year.

jet-tek

One thing to keep in mind just because it got repo'd doesn't
mean she off the hook. If she owes 9k on it and the the bank
auctions it off for 2k she's still liable for the 7k.it's the old pay me now or pay me later.

tankmonkey

not necessarily.

the car itself is the bank's security, and any remaining claim above and beyond the value of the security property itself is generally unsecured in bankruptcy. unsecured creditors go to the back of the line.

there are other issues for the bank, too, including the automatic stay and the unwinding of transfers (including reposessions) immediately prior to the br filing. it's almost certain they'd get to keep the car, but they might have to go to court to do so.

chef chris

Yes necessarily...it's called cram-down value...the bank will get their $ first.

Either way, like I said, she still has to pay. She may get a few grand off, but then she is even more screwed cause she went BK.

mcdanjw

Thanks for the input.

I'm gonna advise her that she should start paying down the debt, at whatever rate she can. Call the bank and try to work something out.

Now the bank still has the car. Wouldn't they have to return it if she starts making payments on the loan?

They repoed it probably 2 months ago... I bet they've already sold it. What would happen then? I assume they would just reduce the amount owed by the blue book value of the car?

This girl is young and doesn't have a clue about this stuff.

It's really sad how some people just weren't raised to have any kind of sense or ethics with this stuff.

Driving w/o insurance pisses me off something fierce.

Red-CL

Maybe she had it but let it lapse.

Infamous425

what kinda car is it? just wondering

Red-CL

It depends on how far she is behind in the payments.

Banks usually would make her pay up until she's where she should be in her payment schedule before they even considered giving the car back.

mcdanjw

A Dodge Neon. I don't think it was bought new either.

I don't know all the details, but I do suspect she was behind on her payments. I'm going to meet with her tomorrow and she's supposed to bring me her loan statements so I can try to figure out what's up.

She's a waitress at my favorite pool hall. That probably explains a lot.

Red-CL

If they sold it, she would only have to pay the balance due.

ie............

If she owed 9k on the car and they sold it for 7k, she owes the bank 2k.

dallison

be glad its not in your name

Red-CL

She owes 9k on a neon she bought used?

jproy

It is my understanding that, under common law, when a car is repo'ed, you have 30 days to pay the full remaining balance or you do not get the car back and you still have to pay the remaining balance after the bank gives the car away for next to nothing. If it has been 2 months she is SOL. I hope she has learned something from this.

SilverJ

Not a good move. Filing bankruptcy over $9000 would be the worst mistake you could ever make. Or letting the debt go...
I dont know how old this girl is but not having any credit for 7 years will make life very hard on her. Insurance rates will go up, no credit cards, no car, no house. --I guess it all depends on what your outlook is on your future earning ability..
I would see if she can borrow the money from a relative..at least half. Make the bank an offer. They will say no initially but they do want to settle..count on it. and get some insurance next time.

chef chris

No such law.

Technically, day one that you are late you are in breach of contract...But no bank will ever repo a car after one day. They have to show a 'reasonable effort' on their part to collect a debt. The actual process is usually more like 90 days of collecting before they will pop the car. There are cases, limited cases, where I've put a 'watch' on an account when I approved it...say I thought it was fraud or I did the dealer a favor...if that loan is even a few days late, we'll pop the car right away. But that is a very limited scenario.

Now, those BUY HERE/PAY HERE places are a WHOLE different ballgame... They'll pop the car while you're driving it...

michiamo

If the bank repoed it because of late payments, she has about 10 days to come up with the payoff (plus repo related expenses), or the bank will auction the vehicle. If redeemed within this time the bank may report it as a redeemed repo, but maybe not (the bank I once worked for didn't report it if you paid off like that). Once car goes to auction, you owe the bank if they sell it for less than you owe, and they definitely report it as a repo. If you still owe money and don't pay, this is a "charge off" on your credit as well.

If the car was repoed because she didn't have collision ins. and wrecked it (they most certainly do this, as you are in breach of contract), she needs to pay to fix the car (again, plus repo fees).

If the car has already been disposed of, and the bank just wants its money, you can try to negotiate a deal. If she has absolutely no money, or way to come up with any, then check the statute of limitations on debt for your state. A creditor only has so long to come after you to collect on bad debt. This can be anywhere from three to seven or more years, each state is different, as is the type of debt being collected. After the statute of limitations runs out, they can try to ask you for the money, but unless you promise them anything, you are free. Once you state that, they can't call to collect anymore. Just be careful in the mean time not to get served, don't answer your door if a stranger's standing there holding papers)! If they sue and obtain a judgement, it's good for 20 years, and if they find out where you work, they'll garnish your wages. The judgement is also renewable after the 20 years (although most are allowed to lapse). This girl really needs to review her options carefully.

In the end, any negative activity will remain on a credit report for seven years, a bankruptcy for ten. Even though there may be a repo, it certainly does look better to have either redeemed the repo, or at least settled the debt with the creditor. She may want to seek the advice of a lawyer as to the best way to proceed based on her situation. I wish her luck, and hope that she did at least learn something from this experience.

F23A4

That's exactly right!! And if she doesnt payup (or make a payment arrangement) they can garnish here wages; which can be quite embarrassing with your employer.

Edward'TLS

Just go to the bank and find out. It's way better than sitting in front of your computer and taking guessworks from everyone around the country.

18anatak

Best advice yet