Here's how it typically works:
Judgment: If you fail to make payments on your car loan, the lender may repossess the car. If you don't redeem the car within the allowed time frame (typically 10 days), the lender may sell it at a public auction. If the sale proceeds don't cover the full amount of the loan, the lender may obtain a judgment against you for the deficiency balance.
Judgment lien: A judgment lien is a legal claim that allows a creditor to seize and sell your assets, including your car, to satisfy a judgment. In most states, a judgment lien attaches to all of your non-exempt property, including your car, real estate, bank accounts, and investments.
Property exemption: Some states have property exemptions that protect certain assets from creditors, including cars. The specific exemptions vary from state to state, so it's important to check the laws in your jurisdiction. For example, in some states, you may be able to exempt a certain amount of equity in your car (the difference between the car's value and what you owe on it) from creditors.
Levying on your car: If a creditor has obtained a judgment against you and has a judgment lien on your car, they can levy on the car. This means they can take possession of it and sell it to satisfy the judgment. The creditor will typically send you a notice of levy informing you of their intent to seize your car.
Redeeming your car: In some cases, you may be able to redeem your car after it's been levied by paying the full amount of the judgment, including any interest, costs, and fees. The specific redemption process varies from state to state.
It's important to note that these are general principles and the specific laws governing judgment liens and property exemptions can vary from state to state. Therefore, it's important to consult with a local attorney or legal expert to fully understand your rights and options if you're facing a judgment and a potential seizure of your car.
