What happens ifyou surrender a car because you can no longer afford the payments?

UPDATED: Aug 18, 2011

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What happens ifyou surrender a car because you can no longer afford the payments?

I recently got a car but I got fired. Now I can’t make any payments. So I plan on just taking it back and leaving it. I need to know whats going to happen after I do that.

Asked on August 18, 2011 Arizona


FreeAdvice Contributing Attorney / FreeAdvice Contributing Attorney

Answered 11 years ago | Contributor

If you have a car that you are making payments on but can no longer afford continuing with them, you can return the car to the lender who has the lien on it. The result is that the lender under your loan will end up selling the car  and if the car is sold for less than what you owe on the loan, you will be responsible for the deficiency.

The lender will then expect you to pay off this deficiency. If you cannot, most likely the lender will file an action against you for a deficiency judgment, perhaps prevail, obtain a judgment and then try and collect on what is owed.

The best thing you can do is try and sell the car for as much or more owing on the loan currently. Take the money and pay off the lender.

Good luck.

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.

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