Can you negotiate deficiency balance?
You may be able to negotiate a settlement or an affordable payment plan to avoid being sued. There are a few circumstances in which you may not have to pay a deficiency balance. In some states, the law doesn’t allow lenders to collect the deficiency balance if you voluntarily surrender your home.
Can you negotiate after repossession?
Repossession is time-consuming and expensive and many lenders will be willing to work with you to avoid that option. You may be able to negotiate a longer grace period or a lower interest rate, which will make payments easier.
How long can a bank come after you for a repossession?
Typically, you’re allowed only 15 days after the repossession to reinstate the loan. If your right of reinstatement is based on the loan agreement, then the time period might be more or less, depending on what the agreement says.
Does repossession affect insurance?
Repossession is a financial issue, not an insurance issue. While it’s true that the act of repossession does not affect your insurance company, it will devastate your credit score.
How to pay a deficiency judgment after a repossession?
Negotiate a Payment Plan to Pay the Deficiency Even after a deficiency judgment is entered, your lender still may work out an agreeable payment plan with you. You can try to negotiate a payment by calling the lender or the lender’s attorney. Almost every lender’s attorney will take your call, and at least listen to payment offers that you make.
What happens if a car is repossessed for failure to make payments?
If your car has been repossessed for failure to make payments, the sale price of your car at auction may not cover the balance that you owe to the lender. If not, your lender can ask that a court enter a monetary judgment against you for the remaining balance on your loan, called a deficiency judgment.
What happens if you are sued for a car loan deficiency?
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.
How to deal with a deficiency on an auto loan?
Dealing with an auto loan deficiency balance and debt collection A deficiency debt on an auto loan results from owing more on the loan than the car will fetch at auction after repossession or surrender. You have options.