Here's what typically happens after a vehicle repossession:
1. Repossession: The lender sends a recovery agency or repossession company to retrieve the car if you default on your loan payments. They have the right to take possession of the vehicle without further notice.
2. Sale of the Vehicle: The lender may sell the repossessed car at a public auction or through a dealership to recover the outstanding debt. The proceeds from the sale are used to pay off the loan, including any late fees, penalties, and repossession costs.
3. Deficiency Balance: If the amount obtained from selling the car is insufficient to cover the entire loan balance, you will be responsible for the remaining debt, known as the deficiency balance. This amount can be significant and may include any outstanding principal, unpaid interest, late fees, legal fees, and other expenses related to repossession.
4. Debt Collection: The lender or a debt collector may take steps to collect the deficiency balance from you. This could include contacting you by phone, mail, or even filing a lawsuit against you in an attempt to recover the unpaid amount.
5. Impact on Credit: Repossession and subsequent debt collection can have a negative impact on your credit score, making it harder for you to obtain credit or secure loans in the future.
6. Legal Rights: It's important to understand your legal rights and responsibilities in the event of a repossession. You should review your loan agreement, state laws, and seek legal advice if necessary to ensure you are fully informed of your rights and options.
