Haven't paid car loan in almost 2 yrs...

Discussion in 'Credit Talk' started by Germette, Mar 19, 2007.

  1. Germette

    Germette New Member

    Hi everyone,
    I'd like to thank anyone who can help me with this in advance - your advice is much appreciated!

    Here's the story: In February 2005 I purchased a vehicle from a "bad credit, no credit" dealership. The cost of the vehicle was approximately $5000 and I put $500 down. After paying for 6 months on a 2 year loan, I moved out of state without notifying them. The unemployment bug bit me and the loan went unpaid...and unpaid...and unpaid. Before I knew it, too much time had gone by for me to catch up on the payments. Fast forward to present day - the loan is still unpaid and I still have posession of the vehicle. It has mechanical issues in addition to not being registered or insured so it is off the road. I just checked my credit report and I'm confused by what I see. The actual dealership shows the loan as "open" and past due more than 120 days, but they haven't reported since November of '06. There are a couple of recovery agencies on there, all of them stating account status as closed, the last one reporting in February of this year. My question is this: will they eventually give up on the reposession? Does a reposession ever become anything like a charge off? My intention when all this started was never to withhold the car or the money from them, however I have just recently started on the road to recovery with my credit and I do not want to end up in a situation where I have to pay them thousands of dollars that I don't have. In addition, the car is in need of much mechanical attention and cannot possibly be worth much. I know that my credit restoration process will be a long one and at this point I am more concerned with paying my current bills on time than I am with my credit score. That said, I'm wondering what my options are for getting this car off my property and out of my life.
    Thanks for reading :)
     
  2. dirtyharry

    dirtyharry Member

    "I do not want to end up in a situation where I have to pay them thousands of dollars that I don't have."

    In other words you want to know how you can have the car for free.

    "In addition, the car is in need of much mechanical attention and cannot possibly be worth much."

    Well, it ran fine when you bought it didn't it? Mechanical problems don't mean you're out of paying the loan back. Shoot, why don't we all just chip in on the repairs that way you don't have to pay for anything? Everything is free, right? I mean you're entitlted to it after all.

    It's people like you that make things difficult for honest people with bad credit.
     
  3. Germette

    Germette New Member

    Ok, maybe I phrased that wrong. I do NOT want the vehicle for free. I do NOT want the vehicle at all. I would gladly give it back (however they would have to come get it because I do not have the money to transport it across the country to get it back to them), but I want to know if I can continue to default on the loan after they have posession. Does it ever become a criminal matter? And my question about how long it takes for them to give up stems from the fact that they can't be trying very hard to reposess - I never hid the car (i.e in a garage, at a friend's house, etc.) I moved out of state and have stayed in the same place for almost 2 years - I have utilities, a bank account, credit cards, etc in my name and all registered to my actual physical address. I'm curious as to why they haven't just come and taken it yet.
     
  4. jasonpot

    jasonpot Member

    One way or another, you're going to have to pay. Either you do a voluntary repossession, where they will auction off the vehicle and you will pay the difference between the price the vehicle was sold for and the pay off amount off the loan. Or, you continue to hide the vehicle from them, they will skip trace you and the same thing will happen anyway. You were supposed to notify the lien holder when you moved out of state. They could report the car stolen and you could be held liable for the cost of the skip tracing and the transport of the vehicle.

    If they cannot locate you, they will eventually charge off the loan and/or sell it to a collection agency and most of the above will still apply. The tradeline on your credit report will be marked as a repo/charge off for 7.5 years after the date you last made a payment on the loan.

    The tradeline, whether you continue to hide the car or voluntarily surrender the car, will hurt impact your credit in a large way so that obtaining new credit or improving your credit will be very difficult until the 7.5 years is up.

    Best case, you call the lien holder and arrange to bring the loan current. They may not wish to no longer do business with you anymore and require that you pay the loan in full in order to keep the car legally. Or, they may work with you and allow you to begin making payments again.
     
  5. woops

    woops Well-Known Member

    I'm not so sure that they can report the car as stolen.
     
  6. eelb

    eelb Active Member

    I don't know how large of "buy here pay here" operation this dealer is, but chances are they don't want to put forth the resources to track the car or debtor down. They probably paid $1k for the car to begin with, and any money they made is gravy. If they were going to put forth the effort to repo the car they would have done it before now. A year and a half is a long time to be delinquent.

    They have to follow the provisions of the FCRA like any other creditor, so the account will fall off after the 7 year reporting period.

    If this is a local Ma and Pa operation, I doubt if the debt would be sold to a junk debt buyer.

    Only other issue I see, is if you ever get the car running, there will be problems with registration because you will be unable to establish ownership of the car.
     

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