If a company repossesses my car can they charge me the full amount?

Get Legal Help Today

 Secured with SHA-256 Encryption

If a company repossesses my car can they charge me the full amount?

I had a car repossessed from me about a year and a half ago. I just got default entry papers that I have a few days to file an objection to. I’m wondering if the car company (financed through them) is allowed to charge me the full amount owed even though they took the vehicle and possibly made money off of it. Also, is it worth sending an objection although I know I owe them some sort of money? I just want to avoid my bank account being frozen or anything that happens from the defaulting. I would like to make payment arrangements. What should I write in the objection letter?

Asked on July 18, 2012 under Bankruptcy Law, Michigan

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 8 years ago | Contributor

When a car is repossessed, its value--what it is resold for--is applied against the amount you owe (though certain costs of repossession and sale are taken out first). Say you owed $10k remaining on the car, and that it was worth $7k when sold; you could be sued for the remaining $3k which was not covered or paid off by the car. However, they could NOT sell the car for $7k then sue you for $10k--they can only recover in total what the value of the loan, and any permitted costs were, and they can't turn a profit on this transaction.

If you are being sued for money therefore which you do  not believe you owe, you should consult with an attorney about what to do.


IMPORTANT NOTICE: The Answer(s) provided above are for general information only. The attorney providing the answer was not serving as the attorney for the person submitting the question or in any attorney-client relationship with such person. Laws may vary from state to state, and sometimes change. Tiny variations in the facts, or a fact not set forth in a question, often can change a legal outcome or an attorney's conclusion. Although AttorneyPages.com has verified the attorney was admitted to practice law in at least one jurisdiction, he or she may not be authorized to practice law in the jurisdiction referred to in the question, nor is he or she necessarily experienced in the area of the law involved. Unlike the information in the Answer(s) above, upon which you should NOT rely, for personal advice you can rely upon we suggest you retain an attorney to represent you.

Get Legal Help Today

Find the right lawyer for your legal issue.

 Secured with SHA-256 Encryption