I am trying to voluntarily return my vehicle (voluntary repossession) as I am no longer able to make the payments. The loan is currently with a collection agency and they do not do repossession, I talked with the original credit company, and they stated they absolutely DO NOT want the vehicle back stating that they do not care if I take 10 years to pay the loan off, they will not take it back. I unfortunately need to release the vehicle from my name in order to qualify for further assistance, and file for bankruptcy. I am at a complete loss as I am unable to sell the vehicle for the balance owing. Timing is also an issue with removing my name from the vehicle. The vehicle in current mechanical condition is worth -$500 what is owed for payoff, so private sale is not really an option.
You should talk with your bankruptcy attorney. I doubt that you need to resolve the car issue before you can file for bankruptcy.
"Can a credit/collection agency refuse to reposes a vehicle if I am not able to pay on the loan/debt?" The laws give creditors certain rights to do certain things. However, the laws do not require the creditors to exercise those rights. So, while your creditor has the right to repossess the vehicle (the collateral for your car loan), the creditor does not have the legal duty to come and get the vehicle.
Your bankruptcy attorney can advise you on what to do with the vehicle. One option that likely is available to you if you qualify for bankruptcy is to stop paying on the vehicle and continue driving the vehicle (as long as you have a valid driver's license and insurance). You probably should not keep any personal item in the vehicle in case the creditor decides to repossess the vehicle.
If you are saying that the vehicle is currently inoperable, the creditor have even more reasons why it does not want to take possession of a vehicle that cannot be driven.
If you file a Chapter 7 bankruptcy, you can state in your case that your intent is to surrender the vehicle back to the lender. Once the case has concluded any debt associated with the vehicle will be discharged in your case. I do not know of any way to "force" the lender to repossess the vehicle, though. There may be a way that you can get your name off the title for liability sake (parking tickets, abandonment, etc.) since you are likely just the registered owner rather than the legal owner. Perhaps the Department of Licensing could help with that.
I agree with the previous excellent answers. The lender would only sell the vehicle at auction and then hold you responsible for the auction and storage costs along with the balance of the loan. A bankruptcy lawyer can help you navigate this problem as you are certainly not the first in this position.
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