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by mweaver on August 17th, 2009
It depends on the laws of your state.
Quite possibly, because you're wanting to do a voluntary surrender, instead of letting your car get repossessed, they want to see if you have the money to continue paying for the car, in which case they wouldn't accept a voluntary surrender, but after so many months of non-payment would consider it a repossession.
Acceptance of a voluntary surrender of a vehicle is up to the lien holder: basically, whether they are willing to let you out of a contract you signed in good faith in exchange for the car back. Three main factors will influence their decision: how much is the car worth, how much is left on the loan (they are highly unlikely to release you from a 10,000$ loan for a 6,000$ car, but, if the car is worth 10 and the loan is 6, they're more likely to accept), and if you genuinely cannot make the payments.
It's kind of like getting a deed-in-lieu-of foreclosure on a house. Only those who are behind/can't pay on their house can do it, and they require endless amounts of paperwork to complete one.
by OhLook - IamNoLongerAnonymous on August 17th, 2009
Of course it is legal. Why would you think otherwise? The loan company has no obligation to allow you to surrender the vehicle. Similarly, they have every right to condition acceptance of the vehicle on you providing certain documents for its review.
by 52xmax95 on August 17th, 2009
They are the loan company. SST out of Missouri
by Phoenix on August 17th, 2009
If you want money from the Gvt...you do what they say.
by Anonymous on August 17th, 2009
WHO are "THEY?"
+5
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You're reading I am turning my vechile in (volunteer surrender) They said I need to send copies of 2 years W2 and current bank statement.Is this legal?
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Comments
Your analysis is flawed in that acceptance of the car is NOT an agreement "to let you out of a contract you signed in good faith in exchange for the car back." If the lender accepts the car, sells it, and recovers only 80% of the loan amount, the lender can still sue for the remaining 20%.
by OhLook - IamNoLongerAnonymous on August 17th, 2009
That's true, but that was part of my point: they often won't accept a car back that they can only sell for 80%, because they can make more money off of you and your interest rate.
by mweaver on August 17th, 2009
I think my bigger point is that it is never a good idea. Voluntary repossession (unless involved in bankruptcy, which is a whole other ball game, and breaks all the rules regarding voluntary surrender) is hell on credit (though, supposedly, not as bad as repossession), can leave you owing thousands on a car you no longer own, and then, because of the poor credit, leave you without the ability to purchase another car for quite a while (I doubt dealerships really want to sell a car to someone who has already had a surrender/repossession.
by mweaver on August 17th, 2009
Not necessarily. A voluntary surrender could allow you to avoid any negative credit repercussions by changing the terms of the agreement before you default on the loan. For example, suppose you have $10,000 loan on a car currently valued at $8,000; and a monthly payment of $300 per month. If you stop paying your loan, the creditor will incur collection, repo, and resale fees, and will surely report your default to the credit bureaus.
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On the other hand, if you inform your creditor of your inability to pay, agree to surrender the car, and agree to pay any remaining balance, your creditor will likely agree to this new agreement. This is a win-win situation. The creditor saves collection costs and avoids losing money; while you eliminate a debt you can no longer afford and save your credit.
by OhLook - IamNoLongerAnonymous on August 17th, 2009
I found a good, simple explanation for the OP on Experians website.
http://www.experian.com/ask_max/max020608d.html
by mweaver on August 17th, 2009
Your link does not address my example. You can only be reported to a credit bureau if you actually breach your loan agreement. As stated above, you can completely avoid a default by voluntarily surrendering the vehicle and negotiating to pay the remaining balance. This is called an “accord and satisfaction.”
by OhLook - IamNoLongerAnonymous on August 17th, 2009
I don't know anything about that particular part of voluntary surrender, my link was, as stated, for the OP, since it's a more official source than AB.
by mweaver on August 17th, 2009