- Default: Failing to return the vehicle as agreed upon in the loan contract constitutes default, giving the lender the right to take legal action against you.
- Deficiency judgment: If the repossessed vehicle does not sell for enough to cover the outstanding loan balance and any associated costs, you could be liable for the difference, known as a deficiency judgment.
- Credit damage: Defaulting on a loan and refusing to cooperate with the lender can negatively impact your credit score, making it harder to obtain credit in the future.
- Legal fees: The lender may incur legal expenses in the process of repossessing the vehicle and pursuing legal action against you, and these costs can be added to your debt.
- Wage garnishment: In some jurisdictions, the lender may obtain a court order to garnish your wages to satisfy the outstanding debt.
- Seizure of other assets: If you have other assets, such as bank accounts or property, the lender may be able to seize them to satisfy the debt.
- Arrest and jail time: In extreme cases, if the lender believes you have intentionally concealed or damaged the vehicle, you could face criminal charges and potential imprisonment.
To avoid these consequences, it's important to communicate with your lender if you are experiencing difficulty making payments and discuss options for resolving the situation.
