Can a finance company repossess a car and then force you pay the entire balance?

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Can a finance company repossess a car and then force you pay the entire balance?

I’ve had my car repo twice with in the last 2years, however I’ve always gotten it back by just paying my balance due. In the past my car was always repo for an outstanding three month payment. just the other day the finance company repo the car for just 1 month payment. Now they are saying that I have to pay my entire loan balance (9,000) before they consider giving me the car back. I was wondering if this is possible and what is my recourse against this?

Asked on March 13, 2012 under Bankruptcy Law, New York

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 9 years ago | Contributor

While you should check the loan, financing, etc. agreements to confirm exactly what they say happens in the vent of a default--since those documents and their terms will control--what you describe is most likely legal. When a car purchaser defaults on his/her loan by missing a payment, it is usually the case that the loan is accelerated and the entire amount comes due; that means that the creditor can insist on repayment in full as a condition of returning the car. It was likely the case that the creditor voluntarily accommodated you earlier, by allowing you to redeem the car by just paying the outstanding payments.


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