Can a finance company repossess your car if the payments are current but you have an old debt?

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Can a finance company repossess your car if the payments are current but you have an old debt?

Both cars were financed from same company but years apart. I purchased a car but due to an accident it was totalled and the insurance company paid the balance. I did not know there was a $2500 balance left, until they just repossesed my current car. They are using that as leverage to get the old debt paid.

Asked on June 22, 2012 under Bankruptcy Law, Virginia

Answers:

FreeAdvice Contributing Attorney / FreeAdvice Contributing Attorney

Answered 10 years ago | Contributor

Whether or not the lender that has a security agreement in the car that you just had repossessed due to a $2,500 balance owed on another debt can legally repossess such a vehicle depends upon what is stated in the last security agreement that you presumably signed with respect to the car that was just taken.

As such, I strongly suggest that you read the documentation that you have with respect to the loan of the car that was just repossessed. Your answer whould be contained in the documentation. If there is no mention of the lender being allowed to do what it did, or even if there is mention in the paper work, I suggest that you consult with an attorney that practices in the area of consumer debt law about your matter.


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