what steps do I need to take when i was left an estate that has a car that still has a car loan attached to it

The vehicle was willed to me but it is not paid off. I want to keep the vehicle,
so what steps do I need to take?

Asked on April 13, 2017 under Estate Planning, North Carolina


SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 3 years ago | Contributor

You will need to pay off, or alternately take over, the car loan (many car lenders/creditors will allow an heir to assume, or take over, the deceased's loan)--if interested in one or both options, speak to the lender about what you will need in terms of documentation and the process. If you are not willing to or cannot pay off or take over the loan, the lender will take the car back--there is no legal way to keep it without, in one way or another, paying the loan. Note that if you do not take over the loan and instead let them have the car, while you will not be personally liable for any amounts due on the car or under the loan, the estate--the money and assets left  behind by the deceased--may be, which means that the lender may be able to get some of the money which might otherwise have come to you or other heirs. The way that works: at the time the deceased passed away, there would have been a pay off amount for the loan--an amount he/she could have paid to own the car outright. If you let the lender take the car, they will then sell it at auction. They will apply whatever they receive at auction vs. the pay off amount; if the auction proceeds (less certain costs of sale and administrative costs) do not fully pay off the remaining loan, the lender could file a claim against and/or sue the estate for the difference.

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