I strongly urge you not to use a debt settlement company.Many of them are scams and promise you relief which is legally impossible. You need to pay Toyota the difference between the loan amount and the market value of the car at the time of surrender. After that there should be no more money owed Toyota;however your default will be noted on your credit report making it harder to get a new car loan.
Toyota cannot repossessed a new used car unless you fail to pay the remaining debt, and they successfully sue you and get a writ of attachment. Use an attorney not a debt service to clear up the old debt. You may need to file an order to show cause in court to get Toyota to provide you with papers proving repossession.
You might find my legal guide on selecting and hiring a lawyer helpful.
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(Even if you are not filing a lawsuit this information can be useful).
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The prior federal administration severely weakened most state’s laws against excessive interest. Unpaid debts now have practically no ceiling on interest which means the final bill can be much more than the original debt.
When you have received a collection notice, lawsuit or even a judgment on an old debt which may have already been paid, or belongs to someone else, or has been discharged in bankruptcy, keep the following in mind. After a creditor writes off your debt, it can then be sold to a collection agency. That agency may sell it again and the next one again. By the time the debt is assigned to a law firm, it can be years pass the statute of limitations, all of the original contracts have been lost and there may be no legal foundation for enforcing the debt. One way of knowing this is that the agency will have no discernible address or they will say they are collecting from a creditor, but the creditor does not know who they are. They will call you at work , and they will not listen to any explanation at all. They will refuse any suggested payment plan and demand a large sum at once. Often these collection agencies and even law firms will file a suit against you, misspell your name, or deliberately send it to the wrong address. You have no notice but they go to court anyway, get a default judgment against you when you do not come to court, and file a judgment lien on your assets such as a home you are trying to sell, or they report you to a credit bureau as a deadbeat. You are allowed to send a 100 word explanation in writing to the three credit bureaus (which they must print) as to why the debt is invalid. Also, many attorneys will take such a case on a contingency basis. A Violations of the fair debt collection act has a fee shifting rule (the creditor pays your attorney). Not only do you get the debt out of your life, you may get a financial award also. Be sure to write to your congress representative to have a stronger federal law to restore a ceiling on interest and to curtail these illegal collection practices.
Mr. Sarno is licensed to practice law in NJ and NY. His response here is not legal advice and does not create an attorney/ client relationship. The response is in the form of
You really need to speak with an attorney licensed to practice in the State of Virginia. In California, there are statutory procedures that must be followed in order for lender to obtain a deficiency on an automobile loan, and unless a lawsuit is filed and a deficiency judgment obtained, so that a writ of attachment could be levied upon the new vehicle, there should not be any risk of a new vehicle being subject to attachment. In California, it is not enough that you owe Toyota money...it would need a judgment against you for the deficiency. I do not know whether the same is true in Virginia.