What happens if a financed car gets towed then auctioned?
3 attorney answers
The contract governs. And its simple: If you breach it, the state laws govern on how the can enforce their security interest. Normally, it simple: You owe x $; and they incurred repossession and resale costs and sell it. You have interest and late fees accruing. Those all balance out and the remainder is what you owe. Can you afford it? Offer to settle of x$, payable at x$ per month at x% interest rate starting on certain date. All is in writing. Indicate you want to try and resolve it but are leaning towards filing bankruptcy but if they will take ($1,000) for example, you will pay them instead of a bankruptcy attorney. The $ amount can be negotiated. Good luck. BUT if you want to file bankruptcy, then I will point out more next.
Your asking that question implies you have not called and discussed with an experienced bankruptcy attorney near you as you would or should know the answer to that question posted here on AVVO. Other facts and issues can gravely affect your case so I will point these out for you next some issues so you know you only need to do one thing now: call an attorney near you to discuss bankruptcy. You need and want to enjoy your fresh start also. But the most important thing is to meet with an attorney as you asking this question means you have not. You care about 2 goals: keeping everything you have equity in and discharging all your debts. If you don't have any of the exceptions to discharge you will obtain that goal; most exceptions are set forth in 11 USC. 523 (Google it) like child support, some income taxes, traffic (in a ch 7) and criminal fines , and presumption of student loans. But some debts are dischargeable in a ch 13 but NOT in a ch 7 so you want to make sure and your attorney will discuss any such types with you also!
Your exemptions depend on what state you have lived in in the last 2 years and thus if in your state, then your states exemptions will apply. Most persons filing keep everything they own but your attorney will confirm that with you when they learn everything you own and the equity thereof!
Some secured debts like homes, vehicles, other secured debts an attorney will discuss your options on also as you must list any debts; but that does not mean you will lose them unless you have too much equity or are in default on paying for them! Discuss those options if they apply with your attorney too.
But other issues can arise that can greatly harm your case. Just one example: If you paid back a relative $3,000 11 months ago and now file bankruptcy next week, the trustee can SUE that relative to retrieve that $3,000 (under what is called a preference) for the benefit of the bankruptcy estate. As a result, most attorneys don't charge to meet with them the first meeting so meet with one no matter what.
Many great attorneys can be found right here on AVVO in your state so look, call, and meet one as soon as you can.
You should also want to know when to file: is there an advantage of waiting versus filing now and who should you pay between now and then! Good luck and enjoy your later fresh start.
Read the contract you signed to finance the vehicle. If you don't pay this loan, the lender can sue you to collect the entire balance. While your insurance company might have been willing to pay the lender for a portion of the damage to the vehicle, now that the vehicle is sold, persuading them to pay is going to be a problem. While you might be able to settle this debt for a discount, your inaction makes this likely to be more expensive than necessary. Hope this perspective helps.
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You need to file an Emergency Bankruptcy to prevent the loss of the vehicle and the insurance proceeds may be at risk, depending on available exemptions. THIS IS NOT LEGAL ADVICE! YOU NEED TO SPEAK TO AN ATTORNEY WHO IS LICENSED IN YOUR STATE FOR LEGAL ADVICE. This is merely suggestions for you to think about in discussing your situation with the local attorney.
If you found this Answer helpful, please mark it as "Best Answer" Please be advised that the answer above is only general in nature cannot be construed as legal advice, given that not enough facts are known. It is your responsibility to retain a lawyer to analyze the facts specific to your particular situation in order to give you specific advice. Specific answers will require cognizance of all pertinent facts about your case. Any answers offered on Avvo are of a general nature only, and are not meant to create an attorney-client relationship.
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