[Renee Vogts]

The engine in my car was damaged and it is not able to be repaired. I need to replace the whole engine which is going to cost about $3000. I just refinanced my loan in Jan to lower my payments. I owe about $9000 on the car so trading it in is not a real good option for me even if I could get someone to take it. I've talked to several dealers and none have been willing. I have had a lot of circumstances change in my life over the last few months and don't think I can keep paying on the car or get it repaired. If I choose to default on the loan and turn the car over in a reposession will I still be responsible for the balance of the loan. If they sell the car at auction I don't forsee them getting much for it without a running engine. Will I be sued for the balance or will it just be dropped and the default put on my credit. My husband and I have a bankrupcy on our credit that was discharged about 5 years ago and we had a vehicle listed with this same financial institution that holds my loan now. I don't know how or if this will effect the situation. My husband and I are pretty much at rock bottom and don't own anything or have any savings, so if they held me to the balance and I couldn't pay it what would happen? We live in Kansas.

[IAAL]

The engine in my car was damaged and it is not able to be repaired. I need to replace the whole engine which is going to cost about $3000. I just refinanced my loan in Jan to lower my payments. I owe about $9000 on the car so trading it in is not a real good option for me even if I could get someone to take it. I've talked to several dealers and none have been willing. I have had a lot of circumstances change in my life over the last few months and don't think I can keep paying on the car or get it repaired. If I choose to default on the loan and turn the car over in a reposession will I still be responsible for the balance of the loan. If they sell the car at auction I don't forsee them getting much for it without a running engine. Will I be sued for the balance or will it just be dropped and the default put on my credit. My husband and I have a bankrupcy on our credit that was discharged about 5 years ago and we had a vehicle listed with this same financial institution that holds my loan now. I don't know how or if this will effect the situation. My husband and I are pretty much at rock bottom and don't own anything or have any savings, so if they held me to the balance and I couldn't pay it what would happen? We live in Kansas.

My response:

Obviously, your credit is going to take a huge "hit." But, basically, you'll remain responsible for the contract amount; i.e., the "deficiency" - - which is the difference between what you owe now, and the price they obtain at auction, plus all costs, attorney's fees, and interest, concerning this matter.

Yes, you can be sued, and the bank can obtain a judgment allowing them to eventually garnish your wages.

It may be cheaper, in the long run, to keep making your payments. I know that sounds distasteful, but the alternative is much worse.

IAAL