ANSWERS: 1
  • Yes. Once a car is repossessed, it is sold at auction. The proceeds of the sale are then applied to your debt. However, the cars rarely sell for the full amount of the debt, and the creditor can collect all fees related to the repossession and sale of the car. On top of that, interest keeps accruing. Before law school, I worked for a debt collection law firm that had a major U.S. car maker as a client. It always surprised me when I would find a debt that started out as $700 20 years ago, but has now raised to $28,000 due to interest, costs, and fees. Once the creditor has a judgment, the judgment usually lasts for 10 years, and can be renewed for another 10 years. During that time the creditor can attach liens to your property, take money out of your bank accounts, and garnish your wages.

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