Can a loan company come after you for loan payments if you already turned in the car?
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Can a loan company come after you for loan payments if you already turned in the car?
I bought a car but couldn’t continue to pay for it. So I voluntarily turned it over to the company. How long can they pursue to collect what is owed?
Asked on February 17, 2011 under Bankruptcy Law, Georgia
Answers:
SJZ, Member, New York Bar / FreeAdvice Contributing Attorney
Answered 13 years ago | Contributor
The statute of limitations, or time to sue (which defines how long a creditor has to take collections action) is 6 years on a written contract, like a loan agreement, in Georgia. At any time up to 6 years after the default, or when you stopped paying, you could be sued. If the car was taken back, it can be sold and the proceeds applied against the full unpaid balance of the loan. If that does not pay off the loan in full, you can be sued for the remaining balance. Unfortunately, since cars depreciate faster than they are paid off, there will almost always be a remaining balance--i.e. the loan company taking the car won't satisfy the loan. They can then take collections action or sue you for any amount you still owe under the original loan.
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